Boohoo secures £15m backing from founding family

THE founding family behind fast-fashion retailer Boohoo has invested £15.35 million in a major fundraising effort aimed at revitalising the struggling business.

This move is part of a £39.3m campaign to stabilise the company and support a new turnaround strategy led by its recently appointed chief executive, Dan Finley, reported the Times.

Mahmud Kamani, who co-founded Boohoo in 2006 and remains its second-largest shareholder, contributed £5.12m to the fund.

His family also showed strong support, with his son Samir Kamani, the CEO of BoohooMan, investing £6.21m. Umar Kamani, co-founder of PrettyLittleThing, added £3m, while Mahmud's sister Rabia Kamani, a minority shareholder, contributed £1m.

The Manchester-based retailer raised funds through a mix of placing, subscription, and a retail offer. Although the retail offer aimed to raise £6m, it brought in just £400,000. Carol Kane, Boohoo's co-founder, also showed her confidence in the company by purchasing 294,350 shares, increasing her stake to 1.45 per cent of the company’s share capital.

Rabia Kamani expressed optimism about Finley’s leadership. “I invested because of Dan’s track record and his clear plans for Boohoo. He was a winner at JD Sports and has been brilliant for Debenhams. His swift actions since becoming group CEO have been very impressive," she was quoted as saying.

Finley, who took the reins in November, brings extensive experience to Boohoo, having previously served as chief executive of Debenhams and spent a decade as JD Sports’ multichannel director. His appointment followed the surprise departure of former CEO John Lyttle in October.

As part of his strategy, Finley has identified £30m in annual cost savings and plans to sell off non-core assets. The company is also conducting a strategic review to explore ways to maximise shareholder value, raising speculation about a potential break-up of its retail empire, which includes brands like PrettyLittleThing, Dorothy Perkins, and Warehouse.

The company’s leadership has faced scrutiny, particularly from the Frasers Group, which owns a significant stake in Boohoo. Frasers accused Boohoo’s board of mismanagement and criticised the appointment of Finley, claiming it was rushed to avoid addressing shareholder concerns. It has called for a restructuring expert and proposed retail tycoon Mike Ashley as CEO, which Boohoo’s board has resisted.

In response to governance concerns, Kamani was recently shifted from chairman to executive vice-chair, with Tim Morris stepping in as independent chairman.