Boohoo Group has raised concerns over Frasers Group’s business intentions, emphasising competition between their brands.
- Boohoo claims Frasers, a significant shareholder, is acting out of commercial self-interest rather than shareholder interests.
- The brands PrettyLittleThing and Karen Millen are highlighted as facing direct competition from Frasers.
- Boohoo’s statement criticises Frasers for its investments in rival companies, including Debenhams and Asos.
- Boohoo insists on governance measures and an independent board appointment before considering Frasers’ board representation requests.
Boohoo Group expressed concerns regarding the motivations of Frasers Group, their largest shareholder with a 27% stake. The letter from Boohoo points out that Frasers is not simply an investor seeking to maximise its stake value, but a competitor engaged in actions that may serve its own strategic interests.
In the statement, Boohoo drew attention to specific brands like PrettyLittleThing and Karen Millen, which it argues are in direct competition with those owned by Frasers. Additionally, the acquisition history concerning Debenhams is cited as an example where Frasers positioned itself as a competing bidder, emphasising the commercial overlap between the entities involved.
Boohoo further notes that Frasers’ investment in Asos, another company that competes with Boohoo’s offerings, reflects a pattern of strategic investments that align with competitive interests rather than those of Boohoo’s shareholders. Boohoo criticises Frasers for leveraging its significant holdings in UK retailers for commercial advantage.
A particular point of contention is Boohoo’s view that Frasers is trying to utilise its shareholding in Boohoo to push forward an agenda centred around Frasers’ business objectives. Boohoo described such actions as inappropriate, stressing the importance of protecting its own commercial strategies and shareholder value from conflicts of interest.
While Boohoo acknowledges the possibility of discussing board representation with Frasers, it insists that any such discussions are contingent upon the establishment of governance controls. Boohoo requires the appointment of a non-executive director who can act independently and safeguard the interests of all shareholders, ensuring that Frasers’ influence does not compromise Boohoo’s operations.
Boohoo remains firm on requiring governance controls and an independent non-executive director before allowing Frasers further board influence.
