Mike Ashley, with a significant 27% stake, urges Boohoo to appoint him as CEO.
- Frasers Group, under Ashley, pushes for an immediate leadership change amid Boohoo’s current crisis.
- Boohoo’s outgoing CEO John Lyttle leaves behind declining sales and a falling share price.
- Frasers criticises Boohoo’s recent refinancing deal, citing unfavourable terms and outcomes.
- Boohoo is exploring business restructuring as it reviews Frasers’ demands and suggestions.
Mike Ashley, a major shareholder with a 27% stake in Boohoo, has firmly requested to be made the CEO of the fashion brand. His demand comes in the form of an open letter addressed to Boohoo’s board.
Under the control of Ashley, Frasers Group has called for a general meeting at Boohoo. The aim is to propose the appointment of Ashley as a director and CEO and also to bring Kroll Advisory’s Mike Lennon on board as a director. This motion is intended to tackle what Frasers refers to as a ‘leadership crisis’ at Boohoo, following the recent announcement of CEO John Lyttle’s departure after five tumultuous years.
In response to Boohoo’s board’s delayed decisions, Frasers Group has felt compelled to act. They express frustration over Boohoo’s lack of engagement regarding leadership propositions, particularly after proposing an ‘experienced individual’ for the vacant position multiple times. This lack of dialogue has led Frasers to assume their proposals have been unofficially dismissed.
Currently, Boohoo faces a steep decline in its performance, with a 36.5% drop in sales over three years and a significant fall in its share price.
Frasers Group has also criticised Boohoo’s recent £222 million debt refinancing agreement. They argue that the terms are less favourable compared to previous arrangements and foresee a need for drastic corporate actions to meet upcoming financial obligations.
As Boohoo considers restructuring to boost shareholder value, Frasers insists that no major business changes occur without its input and that of other major stakeholders.
Boohoo acknowledges receiving Frasers’ proposals and is in the process of reviewing them with its advisers, promising further updates.
Mike Ashley’s call for leadership change at Boohoo highlights ongoing tensions and challenges within the company.
