Indian-born billionaire started Boohoo at Manchester market

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Before Boohoo shot onto the ever-growing fast fashion scene, its owner Mahmud Kamani, 55, sold handbags in traders’ stall.  

He spotted the potential of internet sales and set up his online retailer in 2006 with the aim of delivering their own-branded fashion at rock bottom prices.

The company started out with just three staff and operated out of a Manchester warehouse.

Today it is worth £2.6 billion with a workforce of over 1,000. 

But the company’s shares have plunged by £1.3 billion amid allegations that it was using sweatshops in Leicester to produce cheap clothing during the coronavirus pandemic.

An employee at Faiza Fashion – a factory allegedly producing clothes for Boohoo and Mahmud’s sons’ retailer Pretty Little Thing – told how the factory did not provided its workers with face masks or gloves.

And The Sunday Times reported allegations that workers in a second factory Jaswal Fashions, which makes clothes for Boohoo brand Nasty Gal, were being paid as little as £3.50 an hour and operating without social distancing measures in place.

In covert footage, the undercover reporter recorded himself packing garments clearly labelled as ‘Nasty Gal’.

He was also approached by the factory foreman, who warned: ‘These motherf***ers know how to exploit people like us. They make profits like hell and pay us in peanuts.

‘Take me for instance, I’ve been working for so many years in this industry, I’ve been here for five years but never could I take a proper pay packet. I’m still only on just over £5 an hour.’ 

The findings have prompted an investigation by the National Crime Agency, with the allegations labelled ‘truly appalling’ by Home Secretary Priti Patel. 

Ms Patel today instructed the National Crime Agency to probe the issues and vowed to clamp down on modern slavery in Britain. 

It came as Leicester’s coronavirus cases spiralled in June and claims that these factories were producing items for some of the UK’s biggest fashion brands including Boohoo and Nasty Gal while putting staff at risk of contracting Covid-19. 

An NCA spokesman said: ‘Within the last few days NCA officers, along with Leicestershire Police and other partner agencies, attended a number of business premises in Leicester area to assess concerns of modern slavery and human trafficking’.

Faiza Fashion manager Asim Ali, told MailOnline that all the garments they manufacture are for Boohoo and Pretty Little Thing (PLT). 

He said: ‘All our work is for these two companies and it is the same for all the other garment manufacturers in Leicester. We do not deal directly with them but are given the orders by middle companies who liaise with them.

‘We opened earlier than expected during the first lockdown because there was such an increase in online clothes shopping. Since then, work has not stopped. We are inundated with orders because so many people are buying online.’

Mr Ali added: ‘In the old days we used to get orders for high street shops but all of that has now stopped. The fashion industry has now changed, there are constant demands for new lines which means we have to work even harder to make clothes.’  

PLT was founded by Mahmud’s sons Adam and Umar in 2012 following the enormous success of their father’s business and reported a turnover of £374million in 2018.

By 2022, the company is forecast to be worth around £2.1billion. 

The Boohoo Group bought a 34 per cent stake in PLT for £269.8 million in May.

In 2018, the company was called by MPs – alongside Boohoo, Amazon, Asos, PrettyLittleThing and Missguided – to give evidence in an inquiry into the fast fashion industry, The Mirror reports.

Mahmud’s parents, who were originally from India, arrived in Manchester from Kenya in 1969 when his father was just two years old. 

The Kamanis were forced to flee to Britain by increasing unrest and draconian employment laws that favoured native Kenyans. 

Entrepreneurial Mahmud sold handbags on a market stall. He invested his money wisely in property and began a wholesale business, Pinstripe, sourcing garments from India.

By the early 2000s, the company was selling £50 million-worth a year to high street brands such as Topshop and Primark, which led to Mahmud setting up the Boohoo brand in 2006. The company’s growth quickly skyrocketed.

According to a report by ethicalconsumer.org, Boohoo’s CEO John Lyttle is set to get a £1.04million fee and – if he can increase the value of the company’s shares – a £50million share of his own.

Boohoo’s share value increased by 22 per cent during lockdown as more people turned to at-home online shopping, the report stated. 

Furthermore, senior executives could see increases in salaries between 18 and 30 per cent.

Tatler named PLT co-founder Umar Kamani its eighth most eligible bachelor for 2019, alongside the Duke of Roxburghe and former One Direction star Harry Styles.

His lifestyle is decidedly jet-set, with his contacts book brimming with A-list stars such as Jennifer Lopez, rapper P Diddy and actor Denzel Washington. 

Such is his self-belief that when he wanted to launch PLT in the US three years ago, he offered a six-figure sum to reality TV star Kylie Jenner, half-sister of Kim Kardashian, to appear in one of his £15 orange dresses.

‘It’s all about the hustle,’ he says, with a shrug. ‘I knew I wanted to be in those circles because I’m obsessed with power.’

Power duly followed. The Kylie Jenner coup led to sales increasing ten-fold and allowed him to buy a seven-bedroom mansion in the Hollywood Hills, complete with basketball court.

His Instagram account reveals the very caricature of a playboy – lunching at Nobu in Malibu wearing Gucci slippers, hanging out with P Diddy at the Grammys and Kylie Jenner at Coachella music festival, and posing at the wheel of a yacht on Italy’s Amalfi Coast.

‘A lot of these people are my friends,’ he says. ‘Will.I.Am is a really good mate – we FaceTime nearly every day – as is P Diddy. I was at the LA Lakers game with Denzel Washington a few weeks ago too.’

Love Island stars such as Molly-Mae Hague and girl band Little Mix are among the celebrities to have publicly endorsed the Pretty Little Thing brand in recent years, with other celebrities including Kylie Jenner, Khloe Kardashian, Nicole Scherzinger and Paris Hilton also seen wearing the label.

It has helped 32-year-old Umar, develop a personal wealth of more than £1 billion.

His wealth has allowed him to buy a fleet of cars, including two Rolls-Royce Phantoms, a £300,000 Lamborghini Aventador, a £92,000 customised G-Class Mercedes and a high-end Range Rover.

Umar hit the headlines in May after it was revealed that he furloughed 86 members of staff at his Manchester-based company – while he enjoyed a spa in Dubai.

He took the decision shortly after the lockdown in order to use the Government’s scheme, which used taxpayers’ money to pay workers 80 per cent of their usual income up to a maximum of £2,500 per month. 

Boohoo shares tumble 25% wiping £1.3 billion of value as police probe ‘human trafficking and slavery’ concerns at Leicester factory where workers ‘earn £3.50 an hour and are put at risk of catching coronavirus’ 

By Martin Robinson, Chief Reporter For Mailonline 

Boohoo’s shares plunged by £1.3 billion today after Priti Patel asked Britain’s FBI to investigate the fast fashion chain over claims they were using an alleged £3.50-an-hour sweatshop in Leicester to produce cheap clothing during the coronavirus pandemic.

The Home Secretary has stepped in and instructed the National Crime Agency to probe the issues amid claims the factories were operating without social distancing measures in place with workers not all wearing masks.

Ms Patel has called the allegations ‘truly appalling’ and vowed to clamp down on modern slavery in Britain.

And today Boohoo’s share price collapsed by as much as 25% – falling more than 93p to £2.75 by early afternoon.

It came as Leicester’s coronavirus cases spiralled in June and claims that these factories were producing items for some of the UK’s biggest fashion brands including Boohoo and Nasty Gal while putting staff at risk of contracting Covid-19. 

An NCA spokesman said: ‘Within the last few days NCA officers, along with Leicestershire Police and other partner agencies, attended a number of business premises in Leicester area to assess concerns of modern slavery and human trafficking’.

The Mayor of Leicester had been warned that some manufacturing companies were  breaching Covid-19 social distancing guidelines three months ago, a former minister has claimed. 

Sir Peter Soulsby, 71, and his Labour councillors received a letter from politicians in the Conservative Party warning them of the ‘shuttered premises’ in which textile workers were operating in amid the coronavirus lockdown.   

Baroness Verma went on to claim that it was an ‘open secret’ that factories were open and were risking the health of their workers and the local population in Leicester.   

Yesterday Baroness Verma, who served as Parliamentary Under Secretary of State at the Department for International Development from 2015 until 2016, told The Sunday Telegraph: ‘It was an open secret that the factories were open. The concerns were about the conditions in which some of them were operating.’

In an email sent to Labour councillors in Leicester on April 18, Conservative politicians questioned if the party was ensuring that the activities inside factories were being reported to the police and trading standards.

The letter, seen by The Sunday Telegraph, read: ‘We have had a number of people contacting us in fear that factory owners are flouting the law by appearing closed but with employees still working behind shuttered premises. 

‘This is not only dangerous to the workers in the factories but also to the families and wider communities at large.’ 

Leicester’s deputy city mayor Cllr Adam Clark said: ‘We are told that Public Health England have found no evidence to suggest that the rise in cases in the city is linked to the textile industry.

‘Significant community testing is now under way in Leicester and workplaces and factory settings will be an important part of this in helping us to track and prevent the further transmission of the virus.

‘Complaints about textile factories operating during the lockdown in April were referred to the Health and Safety Executive for investigation. Last week we were made aware of other allegations.

‘These factories were visited by HSE and the police last week. Verbal advice was given, but no notices were served and none of the factories were required to close.’ 

Earlier, Matt Hancock said he had ‘quite significant concerns’ about employment practices at clothing factories in Leicester amid reports one paid its staff less than the minimum wage. 

The Health Secretary also told Sky’s Sophy Ridge On Sunday programme there had been coronavirus outbreaks at food and clothing producers in the city, as he stressed stopping the spread of coronavirus was ‘the number one problem’. 

Mr Hancock said: ‘Well we’ve seen outbreaks in food factories and in clothing factories. There are some quite significant concerns about some of the employment practices in some of the clothing factories in Leicester.

‘They are important problems to deal with, but the number one problem that we’ve got to deal with is getting this virus under control.’ 

His comments come after the Sunday Times reported allegations that workers in Leicester’s Jaswal Fashions factory making clothes for Boohoo brand Nasty Gal were being paid as little as £3.50 an hour and operating without social distancing measures in place.

The findings have prompted an investigation by the National Crime Agency, with the allegations labelled ‘appalling’ by Home Secretary Priti Patel.

The undercover report by The Sunday Times also found that no additional hygiene or social distancing measures were in place, despite the city being in a localised lockdown due to an outbreak of the virus.  

In covert footage, the undercover reporter recorded himself packing garments clearly labelled as ‘Nasty Gal’.

He was also approached by the factory foreman, who warned: ‘These motherf***ers know how to exploit people like us. They make profits like hell and pay us in peanuts.

‘Take me for instance, I’ve been working for so many years in this industry, I’ve been here for five years but never could I take a proper pay packet. I’m still only on just over £5 an hour.’ 

Following the shocking footage, the NCA said in a statement: ‘Within the last few days NCA officers, along with Leicestershire Police and other partner agencies, attended a number of business premises in Leicester area to assess concerns of modern slavery and human trafficking.’ 

This week manager of Faiza Fashion in Leicester, Asim Ali, told MailOnline that all the garments they manufacture are for Boohoo and Pretty Little Thing (PLT), two of the country’s leading online clothing brands.

He said: ‘All our work is for these two companies and it is the same for all the other garment manufacturers in Leicester. We do not deal directly with them but are given the orders by middle companies who liaise with them.

‘We opened earlier than expected during the first lockdown because there was such an increase in online clothes shopping. Since then, work has not stopped. We are inundated with orders because so many people are buying online.’

Mr Ali added: ‘In the old days we used to get orders for high street shops but all of that has now stopped. The fashion industry has now changed, there are constant demands for new lines which means we have to work even harder to make clothes.’ 

Meanwhile Mohamed Talati, 55, who runs 21 F.C. Ltd, a cloth cutting company that provides cloth to the factories told MailOnline: ‘The whole industry is very busy at the moment because there are so many orders to complete. 

‘Most of them need to do be done within a week and since the coronavirus pandemic, online clothes shopping has increased, which is good for us.

‘Factories around here simply cannot afford to close. Many did during the first lockdown but reopened early because there was such a huge demand for clothing.

‘There are only two companies keeping the Leicester garment industry going and that is Boohoo and PLT. Without them there would not be any business. ‘  

Boohoo, whose CEO Mahmud Kamani is reported to be worth £1 billion, has already come under fire for allegedly risking the spread of coronavirus in Leicester after claims that factories supplying the online retailer told staff to come into work during lockdown despite being sick.

North West Leicestershire MP Andrew Bridgen raised the alarm about clothes factories in Leicester in January after being approached by whistleblowers about the illegal practices allegedly employed in some of the city’s clothing factories.   

Priti Patel, the home secretary, asked the National Crime Agency (NCA) to investigate modern slavery in Leicester’s clothing factories.

Responding to the investigation, Home Secretary Priti Patel said: ‘These allegations are truly appalling and I commend the Sunday Times and local MP Andrew Bridgen for their roles in uncovering such abhorrent practices.

‘I will not tolerate sick criminals forcing innocent people into slave labour and a life of exploitation. 

‘Let this be a warning to those who are exploiting people in sweatshops like these for their own commercial gain. 

‘This is just the start. What you are doing is illegal, it will not be tolerated and we are coming after you.’

A statement from Nasty Gal seen by the Times said the company would investigate the claims, but insisted that Jaswal Fashions was not a ‘direct supplier’.

‘Nasty Gal does not allow any of its suppliers to pay less than the minimum wage and has a zero-tolerance approach to incidences of modern slavery,’ it said.

‘We have terminated relationships with suppliers where evidence of non-compliance with our strict code of conduct is found.’

MailOnline have contacted Boohoo.com for comment. 

Boohoo previously told the BBC that it was maintaining closer ties with its suppliers and would be investigating the allegations.

In a statement to the BBC the UK manufacturer said: ‘The Boohoo group will not tolerate any incidence of non-compliance especially in relation to the treatment of workers within our supply chain.

‘We have terminated relationships with suppliers where evidence of this is found.’

On Friday, Leicestershire Police said they had carried out routine visits at nine workplaces in the city to ensure health and safety.

No closure orders were issued and no enforcement was used, the force said.

Detective Inspector Jenni Heggs added: ‘We are aware of recent reports in the media of factories in Leicester continuing their operational work despite being in a period of lockdown.

‘We have been working with partners sharing information to carry out these visits which we will continue to do going forward.’

The shocking claims come in the same week it was revealed the Leicester mayor flouted the coronavirus lockdown to go and see his partner Lesley Summerland, 64, and carry out maintenance on her home throughout April and May.

Neighbours filmed the Labour Mayor at Ms Summerland’s home on several occasions as he arrived ‘carrying overnight bags and shirts.’   

On Monday, Leicester and parts of the surrounding area were placed back into a local lockdown following a spike of Covid-19 cases. 

People are also banned from staying overnight at another household, and those in the restricted area can no longer visit people in private gardens or indoors, and could face fines if they flout rules.