Boohoo recruits Primark executive as new boss, founders step back

LONDON (Reuters) - Boohoo BOOH.L, the fast-growing British online fashion retailer, has appointed a Primark executive as its new CEO to drive the brand's global expansion, on a pay package that could earn him almost 58 million pounds in five years.

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In a move that will see the company's co-founders step back from the day-today running of the business, Boohoo said John Lyttle, currently chief operating officer at Associated British Foods' ABF.L Primark business, will start in March next year.

Lyttle, who has also worked for Matalan and Philip Green’s Arcadia group, oversaw a rise in turnover at Primark to 7.1 billion pounds in 2017 from 2.7 billion pounds in 2010.

“Our next priority for boohoo is to ensure we have world class infrastructure and technology in place and we believe John is the right person to lead that journey,” said Boohoo’s co-founders and joint CEOs Mahmud Kamani and Carol Kane, adding that they have known Lyttle for several years.

Lyttle will receive an annual salary of 615,000 pounds ($804,604) and an annual bonus of up to 150 percent of his salary. He will also participate in a share plan related to the growth in Boohoo’s market capitalisation over a five year period capped at 50 million pounds.

Shares in Boohoo, which listed in 2014 at 50 pence, were up 1.5 percent at 172.4 pence at 0846 GMT, valuing the company at about 2 billion pounds.

“We see this as a great hire for Boohoo at a time when the next leg of growth will require a greater degree of internationalisation and overseas infrastructure,” said analysts at Peel Hunt, who have a “buy” stance on the stock.

For Lyttle to achieve the maximum 50 million pounds share plan payout Boohoo’s market value would have to increase by 180 percent to 5.6 billion pounds.

The median pay of a FTSE 100 CEO was 3.93 million pounds in 2017, according to a report by the Chartered Institute for Personnel and Development published in August - a rise of 11 percent despite criticism from investors and the government over excessive pay.

Founded in Manchester, northern England, in 2006, Boohoo has expanded rapidly, buying the PrettyLittleThing and Nasty Gal brands last year.

Boohoo and fellow online retailer ASOS ASOS.L have bucked a tough market, outflanking and taking market share from traditional rivals burdened with big store estates.

Boohoo’s turnover has increased 24 fold from 24.5 million pounds in 2011 to 579.8 million pounds for the year to Feb. 28 2018.

Lyttle’s appointment means new roles for Kamani and Kane. Kamani will become group executive chairman of the company from March 15 next year and Kane will remain on the main board in an executive role and will assume the title of group co-founder and executive director.

Boohoo said Kamani’s focus will shift to the group’s long-term strategy, while Kane will concentrate on managing and developing the group’s brands.

Together the Kamani family and Kane own 36 percent of Boohoo’s equity.

Reporting by James Davey, editing by Louise Heavens