boohoo group PLC (LON:BOO) has poached the chief operating officer of high street store group Primark to become its chief executive, with John Lyttle to take up the position at the online fashion retailer from 15 March 2019.
The AIM 100-listed group pointed out that Lyttle has been boss of Primark Stores, a division of FTSE 100-listed Associated British Foods PLC (LON:ABF) for eight years, having previously held senior roles at retailers Matalan and the Arcadia Group.
READ: Boohoo shares strut higher on Liberum upgrade
The firm noted that during his eight-year tenure at Primark, turnover has grown by 158% to over £7bn and operating profit has grown by 116% to £735mln for the year ended 16 September 2017, making the firm one of Europe's fastest growing and most profitable retail businesses.
Boohoo said Lyttle’s appointment “is a key constituent of the Group's positioning for its next stage of growth and will be accompanied by a number of changes to the existing main Board roles, all of which are designed to support the journey of the Group through its further international expansion.”
The firm said Mahmud Kamani, currently its joint chief executive, will become group executive chairman of the Company with effect from 15 March 2019.
It added that Carol Kane, currently joint chief executive, will remain on the main board in an executive role and will assume the title of group co-founder and executive director with effect from the same date.
Boohoo said its non-executive chairman, Peter Williams will be stepping down from his role with effect from 15 March 2019.
The group added that it intends to recruit a further independent non-executive director and will commence a search process for this role imminently. A further announcement will be made on the appointment of the successful candidate.
Mahmud Kamani and Carol Kane, boohoo’s joint chief executives, said: "We are thrilled to have secured a candidate of John's calibre as our CEO. We have got to know John over a number of years and are convinced he has the necessary skills to complement what we already have and take the Group on to its next stage of growth.”
They added: “Both of us remain totally committed to the business and will ensure a measured and careful handover.”
Laying foundations for future growth
In a note to clients, analysts at Liberum Capital commented: “The appointment of a new CEO, accompanied with a board reshuffle, is a positive in the laying down of foundations to support future growth.
“This news should not be seen as an upheaval as Mahmud Kamani will lead the strategic direction of the group, while CEO designate John Lyttle will take care of the day to day operations. Carol Kane will continue to drive the creative direction of the brands.”
They added: “More importantly, the CEO designate is a known figure, limiting any cultural mismatches. However, his remuneration package should be read as a key signal of confidence in achieving a 5-year 23% CAGR in earnings.
“The shares have continued to be weak, which we think is wrong, with expectations unchanged of 35-40% revenue growth.
Liberum reiterated a ‘buy’ rating and 240p price target on boohoo shares.
In late morning trading, the stock was nearly 2% higher at 173.35p.
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