// Boohoo sets out a new growth plan as it looks to recover from recent poor trading
// The retailer said it’s existing scheme has “little or no value” and was no longer an “effective incentive mechanism”
Boohoo is to adopt a new growth plan as it looks to strengthen its market capitalisation following recent poor trading performance.
The decision comes as the existing scheme was found to have “little or no value” and no longer operated as an “effective incentive mechanism” for management.
The new plan is “designed to focus solely on creating shareholder value through a series of distinct, stretching share price hurdles” with the aim to reach a £5bn market cap.
Boohoo said it hopes the new scheme, which has been split into five tranches, will “drive long-term sustainable growth and rebuild shareholder value”.
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In a first for the fashion retailer, the growth plan will extend beyond the executive team to include additional members of the senior leadership and the wider employee population.
The review to the existing plan comes as the retailer has been impacted by a “unique and unprecedented set of macro-economic and market headwinds” over the last three years which has weakened its market capitalisation.
Boohoo’s Remuneration Committee chairman Iain McDonald said: “The boohoo group has an outstanding executive team whose ongoing retention is crucial, particularly in an era where the recruitment of such quality is more competitive than ever before.
“In designing the plan, we recognised it needed to go deeper into the business than prior schemes while leaving headroom to attract the world-class talent that is essential to the execution of our strategy and growth ambitions.
“The Company has a proud entrepreneurial heritage, having always encouraged and enabled significant levels of employee share ownership.
“This scheme extends this principle, delivering more accountability and further alignment with our broader shareholder base.”
Boohoo reported sales dropped 11% to £637.7m in the three months to 31 December blaming strong year-on-year comparatives and delivery disruption.
As a result, it expects sales to drop 12% for the financial year.
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