(Bloomberg) -- Fast-fashion giant Shein will spend $15 million upgrading hundreds of factories after an investigation found that two of its suppliers' warehouses are flaunting local working-hour regulations.
The Chinese retailer will spend the money over the next three to four years, Shein said Monday. The move is in response to allegations of labor abuse in a recent UK television documentary that found that employees at two factories in China were working 18-hour days and fined for making mistakes.
Shein said it has reduced orders from two factories where employees were having to work longer hours than permitted by local regulations -- an independent review found employees working as many as 13.5 hours a day. Shein has given the suppliers until the end of December to reduce the time.
However, the company denied its factories withhold worker salaries or illegally deduct wages if targets aren't met.
Shein faces growing criticism over its environmental, social and governance record practices, including worker exploitation and copyright theft. The online behemoth has disrupted the fast fashion industry with its sales of £5 ($6.16) t-shirts and £11 dresses. The company was valued at $100 billion in a fundraising round earlier this year, though the figure has probably dropped some since then.
Shein plans to increase unannounced spot checks and invest more in training to ensure its suppliers comply with its code of conduct.
“While the audit did reveal an issue with working hours, this has been raised with both manufacturers and we have significantly scaled back our orders from them until they take effective action,” said Adam Whinston, head of environmental, social and governance for Shein.
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