Boohoo shares down 13% after PwC steps down

Boohoo shares (LON: BOO) fell after the group released a statement revealing that PricewaterhouseCoopers (PwC) had stepped down.

Shares at the retailer are down over 13% as the group said it was on the search for a new auditor.

Boohoo said in a statement that it “would like to place on record that PwC is still the Group’s auditor at this time. The Group’s Audit Committee has recently launched a competitive tender process for the Group’s audit, and will update shareholders at its conclusion.

“PwC signed an unqualified opinion on the Group’s 2020 Financial Statements and having served as the Group’s auditor since 2014, is not participating in this process,” the statement continued.

It was reported by the Financial Times over the weekend that PwC have stopped working with Boohoo for reputational reasons.

The fashion retailer found itself in a scandal earlier this year when a workers’ rights group flagged serious abuses at Leicester garment factories where employees were paid £3.50 an hour.

Analysts at Jefferies said in a note: “It seems unclear to us which came first, the launch of a competitive tender process by BOO or the indication by PwC of its intention to resign. Regardless, we see no suggestion of any financial impropriety and would be inclined to view this as short-term noise.”

The group has faced many criticisms over its labour practices.

Despite the controversy, Boohoo raised its full-year forecast in September after reporting strong sales over lockdown. Revenue growth targets were upgraded from 25% to 28%-32% for the full year.

Boohoo shares (LON: BOO) are trading -12.33% at 276,68 (1016GMT).