Boohoo urges shareholders to reject Frasers advances
By Abigail Townsend
Date: Tuesday 10 Dec 2024
(Sharecast News) - Struggling retailer Boohoo Group has urged shareholders to vote against moves by Frasers Group to install tycoon Mike Ashley on its board.
Ashley, Boohoo's biggest shareholder, has been increasingly vocal in his criticism of the fast fashion outlet, which has seen sales slump as returns and costs mount.
As well as claiming the business has been mismanaged, Ashley was also highly critical of a £222m refinancing, dubbing it a "catastrophe".
He initially sought to be installed as chief executive after previous incumbent John Lyttle stepped down.
Instead, Boohoo appointed Dan Finley, and Ashley - along with Mike Lennon, a restructuring specialist - are now seeking election to the board at a general meeting on 20 December.
In a letter sent to shareholders on Tuesday ahead of the crunch vote, Boohoo once again urged them to vote against the resolutions.
It said: "Frasers' demands form part of an ongoing campaign by Frasers which appears to be designed to destabilise Boohoo and disrupt your board's plans to unlock and maximise shareholder value.
"Frasers is acting only in its commercial self-interest."
The letter also accused Ashley and Lennon of having "real conflicts of interest" and dismissed a protocol put forward by Frasers to address the concerns.
"In reality, this protocol does little more than state Mr Ashley will comply with basic legal obligations which any director is expected to do," it said.
Last month, Boohoo - which also owns PrettyLittleThing, Debenhams and Karen Millen - partially met one of Frasers' demands when co-founder Mahmud Kamani moved from executive chair to executive-vice chair. Kamani also committed to a number of undertakings, including waiving his salary for the next 12 months.
But Frasers, which has been especially critical of Kamani and wants him to step down, said there was nothing to stop Boohoo simply reappointing him.
Ashley owns around 28% of Boohoo and Kamani 13%.
Ashley owns around 73% of Frasers, which in turn owns around 24% of fellow fast fashion retailer Asos.
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