Scottish fashion brand Quiz believes one of its suppliers has used a sub-contractor which allegedly paid staff just £3 an hour.
The Glasgow-based company said it was “extremely concerned” by claims its clothes were being made in a factory in Leicester where workers are being paid well below the national minimum wage.
The firm said it had suspended use of the supplier, just a week after similar allegations sliced more than a third off the share price of rival Boohoo.
“The group is currently investigating the reported allegations, which, if found to be accurate, are totally unacceptable,” Quiz said.
An undercover reporter for The Times said factory bosses told her she would need to work unpaid for two days before getting a job that would pay between £3 and £4 an hour.
The minimum wage for someone over the age of 25 in the UK is £8.72 an hour.
“From our initial review, we believe that one of Quiz’s suppliers based in Leicester has used a sub-contractor in direct contravention of a previous instruction from Quiz,” the fashion brand said in a statement.
“It is this sub-contractor that is subject of the national living wage complaint. Quiz has immediately suspended activity with the supplier in question pending further investigation.”
Quiz said it “is very grateful to the press for highlighting these alleged breaches.”
Quiz runs more than 70 of its own stores across the UK, and has 174 concessions at department stores such as Debenhams.
It employs more than 1500 people in the UK and Ireland.
Quiz said it would terminate its relationships with suppliers that do not live up to its code of practice.
Chief executive Tarak Ramzan said: “We are extremely concerned and disappointed to be informed of the alleged breach of national living wage requirements in a factory making Quiz products.
“The alleged breaches to both the law and Quiz’s ethical code of practice are totally unacceptable.
“We are thoroughly investigating this incident and will also conduct a fuller review of our supplier auditing processes to ensure that they are robust. We will update our stakeholders in due course.”