Boohoo is urging shareholders to reject Frasers Group’s board appointments before the general meeting on 20 December.
- Proxy advisers Glass Lewis and ISS have recommended that shareholders vote against Frasers Group’s resolutions.
- Concerns include potential conflicts of interest that could harm Boohoo’s shareholder interests.
- The performance of both Boohoo and Frasers Group adds complexity to this corporate struggle.
- Key Boohoo figures emphasise the need for strong governance and independent decision-making.
Boohoo is advocating against the proposed board appointments by Frasers Group, urging its shareholders to vote against these resolutions during the upcoming meeting on 20 December. This stance follows recommendations from proxy advisers Glass Lewis and ISS.
Glass Lewis has voiced significant concerns about the potential conflicts of interest inherent in appointing Mike Ashley and Mike Lennon to Boohoo’s board without proper governance structures. The reluctance of Frasers to address these issues has raised further suspicion over their intentions. As per Glass Lewis, supporting these appointments would not benefit Boohoo’s shareholders.
Tim Morris, Boohoo Group chairman, expressed approval of Glass Lewis’s advice, pinpointing the risks associated with appointing individuals closely linked to Frasers without necessary governance safeguards. CEO Dan Finley echoed this sentiment, acknowledging the importance of maintaining Boohoo’s autonomy to ensure decisions are made in the shareholder’s best interests.
Boohoo has been navigating challenging financial conditions, exacerbated by competition from fast-fashion leaders like Shein and Temu. Their latest report indicated a 15% drop in revenue and a 10.5% fall in adjusted operating profit, with net debt climbing by over £100 million.
Conversely, Frasers Group is also experiencing financial difficulties, as evidenced by their revised profit forecast of £550m to £600m following a 33% decrease in pre-tax profit and an 8% reduction in sales. This backdrop adds another layer of complexity to the boardroom dynamics.
In a recent statement, Dan Finley expressed confidence in Boohoo’s future, particularly highlighting the potential of Debenhams, implying that its value exceeds the current group market capitalisation of over £500 million.
Boohoo remains steadfast in its commitment to protecting its independence amid ongoing corporate challenges.
