Boohoo has hit back against Frasers Group , which is attempting to install its founder, Mike Ashley, as chief executive, describing Frasers’ criticisms of the online retailer as “inaccurate and unfair”.
On Thursday, Sports Direct owner Frasers, which owns 27% of Boohoo, wrote a letter to the online fashion company’s board calling for an emergency meeting of shareholders to vote to install Ashley as its chief to replace current boss John Lyttle.
Lyttle, who joined Boohoo from Primark in 2019, announced last week that he will leave when his successor is found, as the company secured a new £222m debt facility.
Frasers’ letter was highly critical of the Boohoo board, claiming it had “lost its ability to manage the company’s business and investments”, while describing its debt refinancing strategy as “wholly unsatisfactory”, saying it would result in an “appalling outcome for shareholders”.
In its response on Friday, Boohoo, which also owns the Debenhams and PrettyLittleThing brands, said Frasers’ characterisation of its debt refinancing was inaccurate and unfair and argued that the deal would provide certainty around its future.
It also said refinancing had been discussed on numerous occasions with Frasers, which had failed to come up with alternative proposals despite being asked.
Boohoo noted that Frasers had a 23.6% stake in its rival Asos, which needed to be “carefully considered” by its board.
Boohoo saw sales soar during the Covid 19 lockdown as more people ordered online, but its share price has since plummeted and the company is now valued at £395m. It was forced to axe 1,000 jobs this year off the back of losses that have risen to £160m.
Frasers’ letter said on Thursday that there was “no stronger candidate” for the role of chief executive than Ashley and called for him to be installed as soon as possible.
Frasers, which owns the House of Fraser and Evans Cycles brands, also called for the company to appoint restructuring expert Mike Lennon as a director. Frasers first bought into Boohoo in June 2023 and has since built up its stake.
According to Boohoo, Frasers had asked to appoint a non-executive director to its board, but ruled out Ashley being nominated as the candidate for that role on 9 October. Then, hours after Lyttle’s departure was announced on 18 October, Frasers put forward Ashley to become chief executive and gave Boohoo 48 hours to confirm his appointment, according to the online retailer.
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PrettyLittleThing’s 36-year-old billionaire founder, Umar Kamani, the son of Boohoo co-founder Mahmud Kamani, had been tipped to take over as chief executive.
Boohoo said that the appointment of a chief executive was a critical board decision which required careful consideration and proper governance, with the process now well under way.
The board of Boohoo said it was willing to discuss a director appointment with Frasers “in a constructive manner” but said it had not had assurances from Frasers that “appropriate governance” would be followed. Boohoo shares rose 3% on Friday.
Frasers has been contacted for comment.
