Tensions rise between Boohoo and Frasers regarding board appointments.
- Frasers dismisses governance concerns as exaggerated by Boohoo.
- Boohoo accuses Frasers of overstepping with board appointment demands.
- Discussions include competition concerns and shareholder information rights.
- Boohoo advised against approving Frasers’ suggested board members.
In a recent exchange, Boohoo responded to Frasers’ open letter to shareholders with a statement that “desperate people do desperate things.” This comes as Frasers, the owner of Sports Direct, dismisses claims about conflicts and governance concerns as exaggerated. Frasers argues that Boohoo’s competition and corporate governance issues are simply veiled excuses to refuse board appointments of Mike Ashley and Mike Lennon.
Frasers contends that Boohoo has presented unreasonable governance demands and calls these requirements a significant overreach without any legal basis. These governance conditions are stated as excuses to block Mike Ashley and Mike Lennon’s appointments, despite Boohoo’s private admissions that Ashley’s experience could benefit shareholders.
The debate extends to competition concerns, with Frasers arguing that Boohoo’s allegations are unfounded as there is minimal overlap between their businesses. Frasers asserts that although House of Fraser could compete with Boohoo’s Debenhams, Frasers offers a more premium brand than Debenhams’ current market position. Furthermore, Frasers reassures it is not an insider of Asos despite holding a 21% stake, claiming similar access to information as other shareholders.
As the dispute continues, Boohoo shareholders are preparing to vote on Frasers’ proposed board appointments in the upcoming meeting on 20 December. Proxy advisor Glass Lewis has recommended against approving Mike Ashley and Mike Lennon, arguing it is not in the best interest of Boohoo shareholders to support these appointments. Despite Boohoo’s challenges, including competition from fast-fashion retailers like Shein and Temu, the company remains firm in its position against Frasers’ takeover attempt.
Frasers, holding a 27% stake in Boohoo, previously demanded that Mike Ashley take over as chair and restructuring expert Mike Lennon join as a director, citing Boohoo’s poor performance and transparency issues over recent years. These demands were described by Frasers as necessary to address Boohoo’s “dismal results” and supply chain problems.
The conflict between Boohoo and Frasers over board appointments continues, with tensions high as the crucial vote approaches.
