Boohoo seeks new auditor to replace PwC; shares tumble
Boohoo Group Plc shares fell the most since August after the U.K. fast-fashion retailer caught up in a labor scandal said it’s seeking a new auditor to replace PricewaterhouseCoopers.
The stock dropped as much as 17 percent, and was down 14 percent to 272.20 pence at 8:26 a.m. in London trading.
PwC won’t participate in the tender, Boohoo said Monday, adding that the accounting firm signed off on its 2020 accounts with an unqualified opinion. The announcement comes after the Financial Times reported Sunday that PwC decided to stop auditing Boohoo for reputational reasons, citing unidentified people close to the situation.
“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,” analysts at Jefferies said in a note. “Regardless, we see no suggestion of any financial impropriety and would be inclined to view this as short-term noise.”
An independent review published last month found that Boohoo ignored warnings about significant labor violations at U.K. garment suppliers. However, it cleared the company of direct involvement in any abuses.
Boohoo raised its full-year forecast on Sept. 30 after reporting strong sales.
— With assistance from Lisa Pham