“Boohoo takes £775m hit as auditor stands down”, 20 October 2020

Boohoo saw almost £775m wiped off its market value yesterday after the beleaguered fast fashion retailer said PwC was stepping down as auditor.

… [This] spooked investors, sending shares down 20 per cent to 254p at market close yesterday.

The share price plummet lowered Boohoo’s market valuation to around £3.2bn, down from almost £4bn the previous day.

PwC’s departure after 7 years as Boohoo’s auditor comes in the wake of allegations of poor factory conditions in the fashion group’s supply chain in Leicester.

Deloitte, KPMG, BDO and Grant Thornton have ruled themselves out of the race to replace PwC, while EY is still in the running.

While Boohoo did not give a reason for its auditor’s exit, it is understood that PwC planned to resign because of concerns about the risks of working with the company following an inquiry into the firm’s factory conditions.

Greg Lawless, analyst at Shore Capital said he remained “concerned about where this will all end up with [National Crime Agency] scrutiny, a potential HMRC investigation and vocal MPs in Leicester, who are all now firmly interested in working practices and have Boohoo firmly in their line of sight.

“The change of auditor is not helpful as the reputational headlines are damaging and this poses a challenge for institutional and wealth managers.”