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Boohoo has urged investors to vote against Mike Ashley’s demand to be installed on the board of the UK fast-fashion retailer, saying the sportswear tycoon is “not suitable” for such a role.
The statement in a circular to investors published on Wednesday is the latest salvo from Boohoo after Ashley’s company Frasers, its largest shareholder, accused the struggling retailer of mismanaging the business and criticised a £222mn refinancing.
Investors will be able to vote on whether to appoint Ashley, as well as restructuring specialist Mike Lennon, to the board on December 20.
“Frasers and Mike Ashley have history of exerting pressure on competitors, and shareholders should be concerned about the possibility of Mike Ashley joining our board,” said Boohoo.
Boohoo shares have plunged more than 90 per cent since their peak in mid-2020 when the retailer was buoyed by a boom in online shopping during the coronavirus pandemic. Since then, it has had to contend with more subdued demand and higher day-to-day costs from factors including merchandise returns, as well as increased competition from rivals such as Shein and Temu.
Wednesday’s comments come as Boohoo this month promoted an insider to group chief executive, in a snub to Frasers, which had been demanding that Ashley be installed chief executive and director at the retailer.
Boohoo said on Wednesday that shareholders should ask themselves why Frasers would want Lennon, a practising insolvency expert, “in situ at Boohoo”. The company added that Lennon acted on several administration processes for Frasers and therefore was not “a suitable candidate for appointment as a director”.
Boohoo claimed Ashley was “conflicted and not a suitable appointment to the board” as his 73 per cent stake in Frasers meant he had “significant influence over its day-to-day decision making” at the group, a competitor to the fast-fashion retailer.
Ashley and Frasers declined to comment.
Boohoo insisted it was “not deliberately seeking confrontation with Frasers” after the group, known as Sports Direct, previously accused it of “stonewalling” in light of their recent interactions.
Ashley has locked horns with Mahmud Kamani, executive chair and co-founder of Boohoo, in recent months over the retailer’s strategy.
This month, Frasers warned Boohoo not to sell assets without shareholder approval after the fashion group, which also owns the Karen Millen and Debenhams brands, said it would carry out a strategic review that could lead to it being broken up.
Separately, Boohoo said on Wednesday that it would seek to raise about £40mn in fresh funds from new and existing investors as it posted a 15 per cent fall in revenue to £620mn for the six months to August 31, while its adjusted loss before tax widened to £27.4mn from £9.1mn the previous year.
