Boohoo has challenged Frasers Group’s board nominations ahead of a critical meeting.
- Boohoo urged shareholders to reject Frasers Group’s board candidates, Mike Ashley and Mike Lennon.
- The advisory firms Glass Lewis and ISS both recommended voting against the proposed appointments.
- Concerns were raised about potential conflicts of interest compromising shareholder interests.
- Boohoo’s leadership reaffirmed their strategy to maintain the company’s independence.
Boohoo has formally opposed the proposed board nominations by Frasers Group, encouraging its shareholders to vote against these resolutions. The upcoming General Meeting on 20 December will be pivotal, as proxy advisers Glass Lewis and ISS have advised shareholders to reject Frasers’ board candidates.
Glass Lewis highlighted the significant risks of conflicts of interest, specifically referencing the potential appointment of Mike Ashley to Boohoo’s board. The concerns centre around the lack of governance safeguards that could protect shareholder interests. In their analysis, they concluded that support for the dissident nominees at this time would be unwise.
Tim Morris, chairman of Boohoo, expressed support for Glass Lewis’s analysis, which he believes aligns with the board’s view of the risks posed by individuals with historic ties to Frasers.
CEO Dan Finley shared his optimism regarding the proxy firms’ backing, stating that it underscores the necessity of protecting Boohoo’s independence. Finley stated: “I remain focused on executing our strategy to unlock value for all Shareholders as part of the Business Review.”
Despite challenges from fast-fashion competitors like Shein and Temu, which have impacted Boohoo’s financial performance, the company remains committed to its current strategy. In the latest financial report, Boohoo experienced a decline in revenue and operating profit, while its net debt increased significantly.
Frasers Group, too, faces its own set of challenges, with decreasing sales affecting its profit forecasts. Frasers recently revised its profit outlook for the year, reflecting a 33% drop in pre-tax profit and an 8% decline in sales during the first half of the year.
Dan Finley also expressed confidence in Debenhams, highlighting its value potential independently of the group, further asserting Boohoo’s strategic focus amidst the current boardroom dynamics.
The situation remains tense as Boohoo strives to maintain its independence amid pressure from Frasers Group.
