One of Boohoo’s largest shareholders — Edinburgh-based asset management giant Standard Life Aberdeen — has sold most of its stake in the Manchester-based online fashion firm after describing the company’s response as “inadequate” to allegations that factory workers in its supply chain are not treated well enough.
Aberdeen Standard Investments, the asset management unit of Standard Life Aberdeen, sold roughly 27 million shares in Boohoo.
A Standard Life Aberdeen spokesman confirmed a report that SLA had sold all of its shares in Boohoo across three funds that aim to invest responsibly and that these shares accounted for the vast majority of the group’s stake in Boohoo.
Lesley Duncan, Deputy Head of UK Equities at Aberdeen Standard Investments, said: “We invested in Boohoo at IPO at which point it passed our ethical screens.
“The company has achieved strong revenue growth driven by the structural shift in retail from high street to online and its flexible test and repeat model enabling the company to adapt quickly to changing consumer trends.
“We have considered the ESG performance of the company and pro-actively engaged with management on an ongoing basis.
“Over the years we have lobbied the company to improve its management of supply chain transparency, environmental efficiency and working conditions.
“While we would have liked progress to have been quicker we did feel that progress was being made.
“However, in the last few weeks our concerns have grown on the progress being made, which even before recent developments, had negatively impacted our conviction levels in the company.
“Having spoken to Boohoo’s management team a number of times this week in light of recent concerning allegations, we view their response as inadequate in scope, timeliness and gravity.
“We strive to use our influence as significant investors to achieve progress.
“In instances where our standards have not been met, divestment is both appropriate as responsible stewards of our clients’ capital and aligned to our goal of investing for better outcomes.”