The latest conflict between Boohoo and Frasers escalates as the two companies exchange sharp words over board appointments.
- Boohoo criticises Frasers’ demands for board appointments, calling them an overreach and legally unfounded.
- Frasers argues that Boohoo’s concerns are a mere excuse to block experienced candidates from joining the board.
- The competitiveness of Frasers’ brands compared to Boohoo’s is downplayed by Frasers as insignificant.
- Shareholders are advised against appointing Mike Ashley and Mike Lennon to Boohoo’s board.
In a heated exchange, Boohoo has responded to Frasers’ recent open letter by stating, “Desperate people do desperate things.” This comment comes as the Sports Direct owner dismisses Boohoo’s concerns regarding conflicts and governance, describing them as “grossly exaggerated.”
Frasers has accused the fashion giant of using these concerns as a “thinly-veiled excuse” to deny board positions to Mike Ashley and Mike Lennon. The company criticised Boohoo’s list of proposed governance requirements as an excessive overreach without legal basis.
Frasers insists that Ashley’s appointment would offer “significant benefits” due to his experience, a point Boohoo’s board allegedly acknowledged privately. Furthermore, Frasers has attempted to alleviate competition worries, claiming there is “virtually no overlap between the two businesses,” despite House of Fraser being a potential competitor to Boohoo’s Debenhams.
The conflict has intensified as Boohoo shareholders prepare to vote on Frasers’ board nominations. Proxy advisor Glass Lewis has recommended voting against these appointments, arguing it would not serve shareholders’ interests to support Ashley and Lennon. This advice comes amidst Boohoo’s struggle with financial performance as new competitors like Shein and Temu disrupt the market.
Frasers, holding a significant 27% of Boohoo, proposed last month that Mike Ashley should become chair, with Mike Lennon as director, to address Boohoo’s ongoing challenges. The firm has criticized Boohoo for its “dismal results” and issues with transparency, refinancing, and supply chain management.
The clash between Boohoo and Frasers underscores a complex battle of governance and strategy as both companies vie for shareholder support.
