Frasers Group says appointment of Boohoo boss shows ‘disregard’ for shareholders
Mike Ashley’s firm had been trying to install him as Boohoo’s new chief executive, but the online retailer chose someone else.
Mike Ashley’s Frasers Group has hit back after its attempt at a boardroom takeover of Boohoo was snubbed late last week, calling the move an “utter disregard” for shareholders.
In a November 6 letter, Frasers said the decision to appoint former Debenhams boss Dan Finley as its new chief executive was “rushed”, and the company was “desperate”.
It has also set up a website advertising its “solution to Boohoo’s leadership crisis”, called boohoodeservesbetter, adding: “We are confident that we are not alone in these views.”
Frasers had been pushing for Boohoo to install its founder, Mr Ashley, after John Lyttle announced he was stepping down from the clothes seller in October.
Instead, it appointed Mr Finley, who had been in charge of Debenhams, which Boohoo owns, for three years.
Frasers Group, which is also Boohoo’s largest shareholder with a 27% stake, said on Wednesday: “We continue to believe strongly in the potential of the Boohoo business and the quality of its brands.
“However, the directors have pushed boohoo into a terrible refinancing, while refusing to engage properly with Frasers on it.
“They have then rushed out a CEO appointment to try to block the say of shareholders. This has to stop. What will they try next? Desperate people do desperate things.”
It follows Mr Lyttle’s announcement in mid-October that he would step down after five years as boss.
At the same time, Boohoo announced plans for a strategic review, sparking speculation about a potential break-up of the business.
Boohoo also reported that revenues had dropped by 15% to £620 million for the six months to August 31.
In the weeks that followed, Frasers campaigned for Mr Ashley to be Boohoo’s new boss, something which Boohoo’s board expressed concerns about because Frasers is also a major shareholder in competitor Asos.
The November 6 letter demanded the board confirm that Boohoo “will not make a disposal of any asset or business line, in whole or in part, without prior shareholder approval”.
It added: “Prior to agreeing to any such disposal, the board will obtain and publish the confirmation of an independent global adviser/investment bank that the terms of the disposal are fair and reasonable, the disposal has been conducted at arm’s length and the disposal is in the best interests of Boohoo’s shareholders.”
Boohoo declined to comment.
