United Kingdom

Boohoo boss jumps to the defence of fashion chain's founder before AGM

The boss of Boohoo has launched an impassioned defence of the fast fashion chain’s founder as she prepares to face shareholders at the annual general meeting.

Chief executive John Lyttle said Carol Kane played a ‘fundamental role’ in the business and said he ‘looked forward’ to her re-election on Friday.

Kane, 54, is facing a shareholder revolt because of accusations that she had a direct role in the ‘inadequate governance practices’ which led to sweatshop conditions in Boohoo’s Leicester supply chain.

Closing ranks: Boohoo co-founders Mahmud Kamani (left) and Carol Kane (centre) with boss John Lyttle (right) 

The scandal wiped £1billion off the online-only company’s shares in a few days, and they are still trading 17 per cent down.

An independent report found workers doing ‘excessive’ hours in life-threatening conditions, often on illegal low pay, across much of its UK supply chain.

None of the senior directors has lost their jobs over the failures, and Kane and co-founder Mahmud Kamani are still eligible for a £50million bonus if Boohoo’s market capitalisation hits £7.5billion by June 2023.

Shareholder advisory Glass Lewis said ‘senior directors were aware of the serious issues regarding the treatment of Leicester factory workers for at least six months before the scandal broke’, but ‘did not move quickly enough to remedy the situation’.

But Lyttle said: ‘If you ask most shareholders and employees, they feel Carol Kane should stay. She plays a fundamental role, and is a key part of the business. We look forward to the successful re-election of Carol Kane.’

Across the group, sales rose 32 per cent to £486.1million. 

The figures showed that the reopening of non-essential clothes shops on April 12 failed to dampen sales.

Boohoo has relaunched the Debenhams website, after purchasing the brand from administration for £55million, with ‘an exciting pipeline of brands for our digital department store’.

The firm also announced it had agreed to sign up to a forensic supply chain initiative called Fast Forward, a sector-leading auditor that already has members including Asos and Marks & Spencer.

Boohoo’s founders have accumulated extraordinary wealth at the top of the company, known for selling £3 dresses and T-shirts to Generation Z.

Kane holds 33.3m shares in the company, which are now valued at £110million. Boohoo stock rose 0.2 per cent, or 0.6p, to 329.1p yesterday.

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