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UK retail tycoon Mike Ashley has written to fellow Boohoo shareholders to say the company must avoid a “fire sale” of assets, as he steps up his pursuit of a board role at the Aim-listed business.
In his latest letter to Boohoo shareholders, published on Sunday, Ashley wrote that he had met the retailer’s chief executive Dan Finley last week and “discussed a number of opportunities”, particularly for the Debenhams brand, which Boohoo bought in 2021.
Ashley, who owns 73 per cent of Frasers Group, which is Boohoo’s biggest shareholder, also wrote that he was “excited” about “working collaboratively” with Finley to turn around the group. Finley was appointed CEO at the start of November. Frasers has previously criticised Boohoo for having “rushed through” Finley’s appointment.
“Critical to [Boohoo’s] turnaround will be avoiding a fire sale of assets at knockdown prices,” Ashley wrote in the letter. “Debenhams should not be sold and if any other non-core asset sales are deemed necessary, I will insist on a rigorous process to maximise value.”
Responding to the letter, Boohoo said: “Mike Ashley is seeking a Board seat for his own interests, not those of Boohoo’s shareholders. Frasers’ track record of leveraging investments in companies for its own commercial advantage is plain for all to see. Boohoo’s independent board, on the other hand, is focused on maximising value for all its shareholders.”
Frasers, which is best known for its Sports Direct brand, owns 28 per cent of Boohoo. Ashley’s letter also said he wanted to seek out “more cost-effective and sustainable financing” for the business. Frasers, which criticised Boohoo’s recent £222mn debt refinancing, is “committed to supporting these efforts”, according to Ashley.
Boohoo’s shares have fallen more than 90 per cent from their June 2020 peak, a time when online shopping took hold during the Covid-19 pandemic.
Boohoo bought the Debenhams brand, its website and customer data for £55mn at the start of 2021 after the department store chain struggled to survive pandemic lockdowns.
Boohoo has previously said it believes Ashley is unsuitable to join its board and asked shareholders to block him from becoming a director. A shareholder vote on the question is scheduled for December 20.
Boohoo co-founder Mahmud Kamani, who owns 12.6 per cent of the company, last month gave up the title of executive chair to become executive vice-chair, while Tim Morris, a board member since 2021, became chair.
Ashley on Sunday described those changes as a “game of musical chairs”.
If appointed to the board, Ashley said he was “willing to agree that, for as long as I am a director of boohoo, I will not provide any confidential information about boohoo to Frasers, take on any board position at Frasers, discuss boohoo or its business with Frasers, or accept any board position at any competitor to boohoo.”
