Boohoo Group plc (LON:BOO) has announced meaningful progress in its Agenda for Change Programme, to deliver long lasting change to its supply chain and business practices. Sir Brian Leveson PC has been appointed to provide independent oversight of the programme, with KPMG engaged to provide additional resource, expertise and independence, working alongside the Group’s internal responsible sourcing and compliance team, as well as with external supply chain audit specialists Bureau Veritas and Verisio. We believe the calibre of the appointments reflects the Group’s unwavering commitment to implementing in full, and with complete transparency, all recommendations of the Independent Review.
- Agenda for change:The Group set out in detail its Agenda for Change in response to the Independent Review of its supply chain published on 25 September. It includes 1) enhanced corporate governance with the appointment of two new NEDs giving a majority independent board and the formation of a Risk Committee and Supply Chain Compliance Committee; 2) purchasing practices to be redefined with a new Group Director of Responsible Sourcing joining from a major global apparel retailer; 3) supply chain standards to be raised through consolidation of the approved supplier list which will be published in full on an annual basis, the appointment of two external expert supply chain and compliance audit firms and the implementation of an electronic audit programme; 4) support for Leicester’s workers’ rights through the establishment of a Garment &Textiles Community Trust to address hardship in of those working in the sector and 5) support for suppliers to deliver best practice operations and drive improvements across the supplier base.
- High calibre team: We believe the appointment of Sir Brian Leveson, who previously conducted the Inquiry into the Culture, Practices and Ethics of the Press, and KPMG reaffirms the Group’s unwavering commitment to embracing and implementing in full the recommendations of the Independent Review, which Sir Brian’s report will be published, providing further transparency and independence to this process.
- Appointment of NED: The group announced the appointment of Shaun McCabe, currently CFO of Trainline Plc and NED of AO World Plc, as an Independent Non-Executive Director on 17 November. He brings extensive financial experience across e-commerce and retail with previous roles including International Director at ASOS and SFO at Amazon Europe. The appointment of a further NED is in process with the intention to recruit someone with experience in ESG matters.
- Valuation: Boohoo Group trades on FY21 PE of 35.3x falling to 25.5x in FY22. Momentum remains strong across global e-commerce where we see Boohoo as a clear market leader, with a proven platform model backed by £344.9m in net cash.
