Embattled Boohoo strengthens board by naming McCabe as audit chair | Business News


Boohoo, the online fashion retailer which has been rocked by a scandal over working conditions in its British factories, will this week seek to repair its reputation by naming the first of two new board members.

Sky News has learnt that the company will announce on Tuesday that it is appointing Shaun McCabe, a former Amazon and ASOS executive, to chair its audit committee.

Mr McCabe, who will join Boohoo as a non-executive director, is the chief financial officer of Trainline, the transport ticketing app.

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Concerns over exploitation of UK textile workers

His appointment will come four months after the AIM-listed company said it would seek to alleviate City concerns about boardroom governance by recruiting two more independent directors.

Mr McCabe’s arrival is expected to be followed shortly by that of a director experienced in environmental, social and governance issues, according to leading shareholders.

The crisis at Boohoo was sparked by a Sunday Times investigation during the summer which found that some workers in factories in Leicester which supply the company were being paid as little as £3.50-an-hour.

Working conditions at the sites were also exposed as inadequate, sparking a political storm which included an intervention by the home secretary, Priti Patel.

Ms Patel told John Lyttle, Boohoo’s chief executive, that the company must “step up and take responsibility” for its suppliers.

Boohoo appointed Alison Levitt, a leading QC, to investigate the supply chain issues, and her report – published in September – concluded that the company knew of the problems and did “too little too late” to fix them.

She also, however, concluded that Boohoo had not intentionally profited from the failings and that its board has “already made a significant start on putting things right”.

One person close to Boohoo said they believed the appointment of Mr McCabe was a clear signal of the company’s intent to improve boardroom oversight and its public reputation.

The need to do so was exacerbated last month when PricewaterhouseCoopers resigned as the company’s auditor.

Subsequent reports suggested that other major audit firms had declined to tender for the role.

Boohoo founder Mahmud Kamani attends the launch of the boohoo.com spring collection and the Zendaya Edit at The Highlight Room at the Dream Hollywood on March 21, 2018 in Hollywood, California
Boohoo was founded in 2006 by Mahmud Kamani

In financial terms, Boohoo has been one of the British fashion industry’s biggest success stories of the last 15 years.

Founded in Manchester in 2006 by Mahmud Kamani, Boohoo now has a market value of £3.35bn, making it one of the country’s biggest fashion retailers.

In total, it boasts 17 million active customers around the world.

It has attempted to replicate its loyal following among fashion-conscious young women with a move into menswear, while the company also moved to take full control of Pretty Little Thing – which was founded by Mr Kamani’s son – in a £260m deal earlier this year.

Boohoo CEO John Lyttle attends boohoo x All That Glitters Launch Party on November 07, 2019 in Los Angeles
Chief executive John Lyttle was told by the home secretary that the company must step up and take responsibility

Boohoo has been a prolific acquirer of distressed fashion brands, acquiring the Karen Millen and Coast labels last year.

In June, it snapped up the Warehouse and Oasis brands, which had joined the ranks of UK retailers falling into administration during the pandemic.

Boohoo declined to comment on Mr McCabe’s appointment.


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