Shein tells suppliers to end long working days at factories by end of the month

Hong Kong(CNN Business) Chinese fast fashion retailer Shein, the subject of recent controversy around alleged labor rights abuses, says it plans to invest $15 million to improve working conditions at factories in its supply chain.

The money will be spent over the next three to four years to physically upgrade hundreds of factories belonging to its suppliers, the company said in a statement issued Monday.

Shein is an online shopping upstart that sells its cut-price fast fashion apparel all over the world. In October, the UK's Channel 4 broadcast a documentary that made allegations of labor exploitation against two of Shein's factory suppliers in China. Staff were allegedly working 18 hours a day making pennies per item. CNN has not independently verified the allegations.

In its statement, Shein said audits carried out by independent experts had refuted most of the allegations. But the investigation showed that workers at two of its suppliers were working longer hours than allowed under local rules.

Employees at one factory were working a maximum of 13.5 hours per day, with at least two to three days off per month, the statement claimed. At another factory, staff were found to be working 12.5 hours a day with no fixed schedule for days off.

"While these are significantly less than claimed in the documentary, they are still higher than local regulations permit," the statement said, adding that both suppliers have until the end of December to fix the situation or the company "reserves the right to take action against them."

Shein said it has reduced orders from the two producers by three-quarters in the interim.

The company denied another allegation of underpayment of wages made by the documentary, claiming salaries at its suppliers were "significantly" higher than the local minimum wage.

"The claims that factories withhold worker's salaries or illegally deduct wages are also untrue. All salaries are paid at the end of the contracted month and in accordance with local laws and regulations," the statement said.

After the allegations emerged, the Rolling Stones asked for a Shein clothing line featuring the band to be terminated, according to the Independent and other media reports.

Shein was founded in 2008 under the ZZKKO name in China by entrepreneur Chris Xu. At first, the company sold only wedding dresses.

In 2015, the company rebranded as Shein. It competes with Zara, a unit of Inditex (IDEXF), and H&M (HNNMY) for customers who want the latest trends for less.

— CNN's Michelle Toh contributed reporting