Boohoo faces new 10-million-pound claim over Leicester sweatshop scandal

The shareholder lawsuit against Boohoo continues to grow. The Telegraph reported that 11 additional institutional investors have joined the High Court claim against the fast-fashion retailer, adding roughly 10 million pounds in new claims and pushing the total compensation sought to 245 million pounds.

The new claimants include the Bank of Korea and Stichting Shell Pensioenfonds, the multibillion-euro Dutch pension fund for Shell employees, alongside US public-sector pension funds such as the Illinois Municipal Retirement Fund and the Public Employees' Retirement System of Mississippi.

The lawsuit, first filed in May 2024 by the California State Teachers' Retirement System, which manages more than 417 billion dollars in assets, stems from the 2020 crash in Boohoo's share price. The stock fell 42 percent after reports revealed that workers in Leicester factories supplying the retailer were being paid as little as 3.50 pounds an hour — below the legal minimum wage — while working in cramped conditions, with some facilities allegedly remaining secretly open during Covid-19 lockdowns. The scandal wiped more than 1 billion pounds off Boohoo's market value.

Boohoo contests allegations

The investors allege that co-founder Mahmud Kamani must have been aware of conditions in the Leicester factories before the revelations became public, and that the company failed to properly disclose the risks. In High Court filings, lawyers from City firm Fox Williams, representing the investors, said the claimants relied on "misleading/untrue statements or omissions" by the company.

That position stands in contrast to the independent review of Boohoo's supply chain led by barrister Alison Levitt KC, which concluded that unacceptable conditions were "endemic" in the supply chain but that Boohoo did not deliberately allow them to exist or intentionally profit from them.

A spokesman for the company — which rebranded as Debenhams Group in 2025, four years after acquiring the collapsed department store chain out of administration — told FashionUnited that "the company strongly contests the allegations and will vigorously defend any claim.”

In total, 58 investors are now suing the retailer, including five retail investors who recently joined, while 20 investors have withdrawn from the action since its launch two years ago. The case, one of the highest-profile ESG-related securities claims before the English courts, is proceeding in the Commercial Court under section 90A of the Financial Services and Markets Act.