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17 Nov 2020 | 11:23

Boohoo shores up board with non-executive appointment

(Sharecast News) - Boohoo, the embattled fast-fashion retailer, has moved to strengthen its board with the appointment of Shaun McCabe as chair of the audit committee. McCabe, the current chief financial officer of ticketing app Trainline and a former executive at ASOS and Amazon Europe, joins as a non-executive director with immediate effect. He will also sit on the group's remuneration and nomination committees.

McCabe said: "Having spoken extensively with fellow members of the board, I look forward to helping the group add further independent experience and increased oversight on matters of compliance and business practices."

Over the summer, an investigation by The Sunday Times and Guardian discovered poor working practices at factories in Leicester which supply up to 40% of Boohoo garments. Workers were not paid the minimum wage and Covid-19 risks were not assessed.

An independent report commissioned by Boohoo in response called the retailer's monitoring of factories "inadequate" and blamed weak corporate governance.

The company accepted the report's findings and said it would appoint two additional non-executive directors. At the time, chief executive John Lyttle said: "It is clear that we need to go further and faster to improve our governance, oversight and compliance."

Speaking on Tuesday, chairman Mahmud Kamani said: "I am committed to supporting and driving our agenda for change to build a better Boohoo for the benefit of all the group's stakeholders.

"[McCabe's] deep knowledge and experience of e-commerce and retail will be a great asset to the board. As a group, we are committed to implementing our agenda for change."

According to Sky News, quoting unnamed shareholders, the appointment of another non-executive with experience in environment, social and governance issues will be announced "shortly".

Greg Lawless, analyst at Shore Capital, said of McCabe's appointment: "In our view, this looks like a good addition to the Boohoo boardroom.

"We think that Boohoo is perhaps reaching an inflection point and the Leicester sourcing scandal reflects growing pains. This shows an evolving board from which we believe investors might take some comfort."

But he added: "We continue to wonder whether there has been any brand damage and have highlighted before that it will be interesting to understand the social media influencer's perspective on events over the last six months. If there is any negative backlash, this could start to impact the revenue growth."

As at 1115 GMT, shares in Aim-listed Boohoo were up 1% at 287.0p.
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