Boohoo has issued a robust response to the open letter from Mike Ashley’s Frasers Group. The letter accused Boohoo of management failures and vied for Ashley’s appointment as CEO.
- Frasers criticised Boohoo’s leadership and financial strategies, citing a substantial decline in share value.
- They accused Boohoo of ignoring meeting requests, describing their response as a “stonewalling” tactic.
- Boohoo dismissed Frasers’ characterisation and defended its debt refinancing as beneficial for its future.
- Boohoo expressed concern over Ashley’s large stakes in both Frasers and competitor ASOS, citing potential conflicts.
Boohoo responded firmly to claims made by Mike Ashley’s Frasers Group in an open letter, which criticised Boohoo’s management and proposed installing Ashley as its new CEO. The letter outlined perceived leadership failures and termed Boohoo’s debt refinancing strategy as inadequate, contributing to a decline in shareholder value.
Frasers drew attention to Boohoo’s declining stock prices, noting a 30 per cent decrease year-to-date and a 17 per cent drop over three months. They criticised Boohoo’s leadership as being in crisis and lacking responsiveness to serious requests for meetings.
Accusations of “stonewalling” were levied by Frasers, arguing that Boohoo’s lack of engagement demonstrated a disregard for shareholder concerns. They insisted that such tactics hindered any constructive dialogue about resolving these alleged issues.
In its defence, Boohoo contested Frasers’ narrative, stating that the board had not dismissed or delayed any discussions regarding Frasers’ proposals for board representation. Boohoo countered that it has been proactive in maintaining open communication channels.
Highlighting potential conflicts of interest, Boohoo noted the significance of Mike Ashley’s substantial shareholding in both Frasers and ASOS. The retailer stressed the necessity of evaluating such elements thoroughly before considering any leadership changes, to safeguard the interests of all stakeholders.
Boohoo refuted the claims regarding its debt refinancing, portraying it as a move that ensures long-term financial stability and is supported by major high street banks.
The fashion retailer also stated that it was open to constructive meetings but required assurances from Frasers about governance requirements before any CEO appointment could progress.
The corporate dispute between Boohoo and the Frasers Group underscores a significant tension over leadership and strategic direction.
