Shares of Boohoo Group PLC (LON: BOO) surged 3.27% today after the company appointed Sir Brian Leveson PC to provide independent oversight of the Group's Agenda for Change programme.
The programme is meant to deliver long-lasting and meaningful change to the Group's supply chain and its business practices.
Sir Brian will report directly to the Board and his reports will be published ensuring that the process remains transparent and independent from the fast-fashion company’s executives.
Today’s appointment marks another crucial step in the right direction for Boohoo following the Leicester sweatshop labour scandal that tarnished the company’s reputation triggering a significant selloff.
Boohoo is showing a commitment to transforming its supply chain by getting more oversight over third-party suppliers who represent a big part of its supplier network who might be perpetrating illegal and inhumane policies as was the case in Leicester.
The markets lukewarm reaction to today’s appointment may mean that most investors were unimpressed by the move, which does not bode well for the company’s share price.
Boohoo might have to do a lot more in order to attract some of the investors who sold its stock following the Leicester scandal led by ethical investors who said that such practices are not aligned with their investment ethos.
Boohoo share price
Boohoo shares today surged 3.27% to trade at 299.8p having rallied from Wednesday’s closing price of 290.3p.
However, Boohoo’s financials look quite solid given that its one of the few British retailers whose performance was largely unaffected by the pandemic given that most of their sales are generated via online channels.
The company has performed much better than most of its high street peers some of whom have had to declare bankruptcy, while others are barely surviving due to the coronavirus lockdown measures that saw most shopping malls close down.
All in all, Boohoo’s business has thrived during the multiple pandemic lockdowns largely because its business model and products have a large and growing customer base and this is unlikely to change in the near future, unlike most of its peers.
Mahmud Kamani, Group Executive Chairman, commented: “I am encouraged by the progress that has been made to-date by our teams since setting out our Agenda for Change programme in September. I and the board are fully committed to this programme, with the appointments of Sir Brian Leveson and KPMG bringing independent oversight, additional expertise and further transparency to a programme that will help us on our journey to lead the fashion e-commerce market globally in a transparent manner.”