Mike Ashley seeks a leadership role at Boohoo amidst a corporate upheaval.
- Frasers Group criticises Boohoo’s current leadership and performance.
- Boohoo’s revenue shows a marked decline, sparking calls for change.
- A strategic review by Boohoo considers drastic restructuring options.
- Tensions rise between Ashley and Boohoo’s current leadership.
Mike Ashley, through Frasers Group, has made a decisive move to assume leadership at Boohoo, aiming to navigate the company through its ongoing leadership crisis. The group’s call for Ashley’s appointment is rooted in strong criticism of Boohoo’s current leadership and its declining business performance. This push follows the announcement by Boohoo’s CEO, John Lyttle, of his intention to step down.
Frasers Group has highlighted Boohoo’s deteriorating financial health as a key reason for advocating a leadership change. Boohoo’s revenue diminished by 36.5% in the six-month period ending August 2024, with a consistent decline in gross profits over successive reporting periods. The company’s share price has also been a concern, plummeting 29% year-to-date and experiencing a 17% drop in the recent quarter.
The letter from Frasers Group criticises Boohoo’s board, accusing them of overseeing a significant decline in share value and using obstructive tactics to sidestep engaging with their demands. This includes delaying interactions with executive chairman Mahmud Kamani, which Frasers finds particularly frustrating.
Recently, Boohoo has launched a strategic review to explore potential paths for enhancing shareholder value, which may include a company break-up or selling off brands such as PrettyLittleThing, Dorothy Perkins, and Warehouse. This review underscores the gravity of Boohoo’s current predicament and sets the stage for a boardroom conflict between Ashley and Boohoo’s existing leadership.
As Frasers Group has incrementally increased its holdings in Boohoo since June 2023, its influence within the company is more pronounced. The group firmly believes that Mike Ashley’s appointment would effectively address the leadership void and stabilise Boohoo’s depreciating value.
This unfolding scenario at Boohoo is pivotal and could significantly alter its business trajectory amidst financial turmoil.
