Frasers Group has expressed concerns over Boohoo’s latest strategic decisions, particularly around leadership and asset management.
- Frasers has called for Boohoo to refrain from making asset disposals without shareholder consent, in a public letter.
- The group’s demand comes after Boohoo appointed Dan Finley as CEO, a move Frasers labelled as rushed.
- Frasers argues that Boohoo is in a weak financial position, making any asset sales unfavourable.
- Boohoo has defended its actions as necessary for proper governance, dismissing Frasers’ claims as misleading.
In a public letter, Frasers Group has addressed the board of Boohoo, urging them to confirm that they will not proceed with asset disposals without prior approval from shareholders. Frasers also insists that any potential disposal should be evaluated by an independent adviser to ensure fairness and alignment with shareholder interests.
The letter was issued following Boohoo’s announcement on 1 November that Dan Finley, previously CEO of Debenhams, would be taking over from John Lyttle as CEO. Frasers has criticised this appointment, arguing that it was hurriedly made to limit shareholder involvement. This criticism follows Frasers’ earlier suggestion that Mike Ashley should become a director and CEO of Boohoo.
Frasers, which holds a significant 27% stake in Boohoo, claims that the latter’s leadership has failed to engage properly with them on matters of refinancing and governance. Frasers perceives Boohoo’s strategies as reactive, stating, “Desperate people do desperate things.”
On its part, Boohoo has defended its decision-making process, highlighting the importance of proper governance and careful consideration in leadership appointments. In response to Frasers’ comments, Boohoo has described these as inaccurate and unfair.
Frasers has asked Boohoo to engage with them regarding alternative options before considering any asset disposals. They believe such actions would occur under financial pressure and result in undervalued transactions, negatively impacting Boohoo’s market position.
The ongoing dispute highlights significant differences in strategic vision and governance expectations between Frasers and Boohoo.
