Boohoo directors support embattled business with share buying spree

Boohoo co-founders investment of £15 million in company’s shares pushed the price up 12% and halted its decline during a torrid period as it fights allegations of serious supply chain issues.

Before the market closed last night Mahmud Kamani purchased five million shares at a value of £10.7 million and Carol Kane bought two million worth £4.3 million. This helped to push the share price up 12% to 223p after a sustained period of share selling from investors.

Following the revelations of Boohoo suppliers failing to comply with National Living Wage requirements a number of major shareholders in the company sold their holdings as it became clear Boohoo’s environmental, social, and governance (ESG) credentials were not up to expectations. Boohoo also suffered from its products being delisted by Next, Asos, Zalando and Amazon.

This contributed to a decline in the share price from a 12-month high of 433.3p to around 200p and severely knocked confidence in the company. Although the buying spree by the directors has played a major part in the shares moving up to a current 229p there are still concerns around the company as investigations into its practices, and that of its suppliers, in Leicester are ongoing.

Interestingly Boohoo is a core holding in Aberdeen Standard Investments’ UK Responsible Fund and its UK Ethical Equity Fund despite supply chain issues having arisen previously. The future of such positions will be determined by the investigations and could clearly prompt further share disposals.