NEW YORK ( CNN ) -- Clothing retailer Gap Inc. has fired an Indian company accused of using child labor to make clothes , the company 's president said . Dan McDougall of the Observer said these were among the children working in an Indian factory , making clothing . `` It 's deeply , deeply disturbing to all of us , '' Gap President Marka Hansen said Sunday after watching a video of children at work in a New Delhi , India , sweatshop . `` I feel violated and I feel very upset and angry with our vendor and the subcontractor who made this very , very , very unwise decision , '' Hansen said . Hansen blamed the alleged abuse on an unauthorized subcontractor for one of its Indian vendors and said the subcontractor 's relationship with the Gap had been `` terminated . '' She said the garments allegedly produced by the children represented a small portion of a single order placed with the vendor and that the clothes would not be sold in stores . `` We strictly prohibit the use of child labor , '' Hansen said in a statement . `` Gap has a history of addressing challenges like this head-on , and our approach to this situation will be no exception . `` In 2006 , Gap Inc. ceased business with 23 factories due to code violations . We have 90 people located around the world whose job is to ensure compliance with our Code of Vendor Conduct . '' The report first appeared Sunday in Britain 's Observer newspaper . Watch how children worked as virtual slaves » . The Observer spoke to children as young as 10 who said they were working 16 hours a day for no pay . The paper described the workplace as a `` derelict industrial unit '' where the hallways were flowing with excrement from a flooded toilet . One 10-year-old boy told the paper he was sold to the company by his parents . `` ' I was bought from my parents ' village in [ the northern state of ] Bihar and taken to New Delhi by train , '' The Observer quoted the boy as saying . `` The men came looking for us in July . They had loudspeakers in the back of a car and told my parents that , if they sent me to work in the city , they wo n't have to work in the farms . My father was paid a fee for me , and I was brought down with 40 other children . '' Another boy , 12 , said he worked from dawn until 1 a.m. and was so tired he felt sick , according to the paper . But if any of the children cried , he told The Observer , they would be hit with a rubber pipe or punished with an oily cloth stuffed in their mouths . The children were producing hand-stitched blouses for the Christmas market in the United States and Europe at Gap Kids stores , according to the newspaper . The blouses were to carry a price of about $ 40 , The Observer reported . The Gap faced criticism for similar practices in 2000 , when a BBC documentary uncovered young girls producing Gap products at a Cambodian factory . But since then , Hansen said , the company has developed comprehensive policies to prevent abuse and protect workers ' rights . Hansen said violations of those policies are now `` extremely rare . '' She said she does not support closing any factories in India in response to the allegations because it would deprive those working in proper conditions of their income . The Gap also operates Banana Republic and Old Navy stores . It has 3,100 stores around the world . E-mail to a friend .
Clothes giant fires contractor at center of child labor allegations . The company said it fired the contractor, who was not identified, after an investigation into his alleged involvement in a scheme to pay underage workers for work on its clothing lines. Boy , 10 , tells British newspaper he was sold to a sweatshop by his parents . Gap : Garments allegedly produced by the children will not be sold in stores .