Boohoo Group accuses Frasers Group of prioritising its own interests in strategic review demands.
- Frasers Group seeks greater influence over Boohoo’s strategic decisions amidst the company’s review.
- Mike Ashley’s investments in other retailers raise concerns of conflicting interests.
- Boohoo’s co-founder, Mahmud Kamani, denies intentions to repurchase his company’s brands.
- Boohoo imposes conditions on Frasers for any future board representation.
In a recent development, Boohoo Group has openly criticised Frasers Group for pursuing its own interests in a strategic review of the company. Boohoo, an online fashion retailer, highlighted concerns regarding Frasers’ intentions, suggesting that the group’s demands are driven by an agenda that prioritises commercial gains rather than supporting Boohoo’s broader shareholder interests.
Frasers Group, holding a substantial 27% stake in Boohoo, has been assertively requesting a more significant role in Boohoo’s ongoing strategic review. This review, initiated last month, aims to enhance shareholder value, with options on the table including the potential sale of brands such as PrettyLittleThing, Karen Millen, Oasis, and Warehouse.
The focal point of Frasers Group’s demands involves restricting the sale of any of Boohoo’s brands without prior shareholder approval. The underlying apprehension is rooted in speculation that Mahmud Kamani, Boohoo’s co-founder and a major shareholder, may attempt to reacquire Boohoo and its brands at a reduced price. Kamani, controlling 23% of Boohoo’s shares, has categorically dismissed these claims, affirming his commitment to maximising value for all shareholders.
Boohoo responded to these assertions by reaffirming the alignment of Kamani’s interests with the company’s goal of maximising shareholder value. Furthermore, Boohoo has sought similar assurances from Frasers, requesting that Mike Ashley and his representative, Mike Lennon, clarify their intentions or explain any hesitations in providing equivalent commitments.
In a decisive move, Boohoo has refused to accede to Frasers’ demands for board representation, unless it is for a suitable non-executive director. The online retailer is focused on preserving its independence and has emphasised that any appointed director from Frasers must be free from involvement in decisions impacting competitors, and safeguard confidential commercial information.
Boohoo also stipulated stringent conditions should Frasers seek board representation, requiring commitments that avoid conflicts of interest, as well as an indemnity from Frasers to protect against potential losses resulting from breaches of these commitments. This tension between the two companies has escalated recently, with Frasers even launching a dedicated website to bolster its position, urging Boohoo’s shareholders to unite in supporting its grievances.
The ongoing conflict between Boohoo and Frasers highlights the complexities of managing shareholder interests amid competitive market dynamics.
