Mr Hoare, founder of Talisman Management, a private investment firm, will start work immediately and will manage the day-to-day operations of the company.
After the rows which followed Ms Ann Iverson's remuneration last year, Mr Hoare, 47, will not receive a bonus, though he receives undisclosed share options excercisable over five years and which are based on share price performance.
Though the company would not specify Mr Hoare's salary, it said that he would be paid "significantly less" than Ms Iverson, who earns basic pay of pounds 450,000 a year and the finance director who earns pounds 325,000.
Some analysts questioned Mr Hoare's lack of retailing experience. "What this company needs is management of iron, not unknowns," said one.
However, Ms Iverson, who has come under shareholder pressure after she failed to rejuvenate the group's flagging fortunes, denied this was an issue: "It's not a personality contest here. What this business needs is someone who can give operational support and help me turn the business around. David will provide a solid foundation for that."
Asked to comment on Mr Hoare's lack of experience in retailing, Ms Iverson said: "That is absolutely ideal. I am the retailer with over three decades of experience. He brings operational excellence."
Ms Iverson said she hoped to appoint a replacement for Basha Cohen, who is resigning as head of design and buying before the year-end. "We are very far ahead on this," she said.
Several analysts said that Mr Hoare's appointment would take pressure off Ms Iverson. "The scale of turning around this company was just too big for one person," said one City observer.