Mike Ashley, owning 27% of Boohoo, urges to be made CEO amidst leadership turmoil.
- The retail giant Frasers demands Ashley’s immediate appointment as Boohoo’s CEO and a board director.
- Frasers criticises Boohoo’s management and financial performance, citing sales and share price drops.
- A controversial £222m debt refinancing deal at Boohoo is criticised as detrimental to its future by Frasers.
- Boohoo is considering business restructuring, but Frasers insists on major shareholder consultations first.
Mike Ashley, a major stakeholder of Boohoo with 27% shares, has publicly insisted on taking the helm as CEO at Boohoo, a move outlined in an open letter to the company’s board. Frasers Group, managed by Ashley, has formally requested a general meeting to propose not only Ashley as a director and CEO but also Mike Lennon from Kroll Advisory as a director.
This demand comes as Boohoo faces a leadership void following the recent departure of CEO John Lyttle after a five-year tenure. Frasers claims it has repeatedly suggested appointing seasoned professionals to Boohoo’s board, emphasising this point following discussions with a Boohoo non-executive director.
Despite these proposals, Frasers states that Boohoo’s board has not made a decisive response, receiving instead what Frasers describes as stalling tactics. In a critical stance, Frasers accused the board of not addressing the ‘leadership crisis’ and failing to engage constructively with its largest shareholder.
Boohoo’s financial woes are underscored by a 36.5% sales decline over three years and a significant share price drop. Frasers highlights these issues to support Ashley’s demand for leadership intervention. Further, Frasers criticises Boohoo’s recent £222m debt refinancing agreement, calling it unsatisfactory and predicting it will necessitate drastic business actions.
Amidst these tensions, Boohoo is exploring options to enhance shareholder value, including potential business divestitures. However, Frasers calls for a halt on any asset sales unless there is a prior consultation with major shareholders, including itself.
Boohoo’s board is currently evaluating the legitimacy of Frasers’ requisitions and plans a further announcement. Frasers remains adamant that it had exhausted all means to engage Boohoo’s board on urgent concerns, pressing for an alternative strategy to the refinancing that Boohoo overlooked.
Frasers Group’s demand for Mike Ashley’s leadership reflects deep concerns over Boohoo’s current management and financial strategy.
