Frasers Group has put forward a proposition to address Boohoo Group’s leadership concerns.
- Mike Ashley has been suggested as a replacement for outgoing CEO John Lyttle.
- Boohoo’s recent performance is said to hinder its growth potential.
- Frasers Group has criticised Boohoo’s new debt arrangements as inadequate.
- The Boohoo board is currently evaluating the proposal, with further updates expected.
Frasers Group has suggested appointing Mike Ashley as Chief Executive Officer of Boohoo Group, following John Lyttle’s sudden resignation on 18 October 2024. Lyttle’s departure has been associated with Boohoo’s refinancing announcement, leading Frasers Group to describe the situation as a ‘leadership crisis’ requiring immediate attention. As Boohoo’s largest shareholder since June 2023, with a 27% stake, Frasers Group is positioned to press for this change.
The open letter, sent by Frasers Group on 23 October 2024, highlights Boohoo’s declining trading performance and significant drop in share price. It forecasts that the upcoming half-year results will reflect a decrease in gross profit for the sixth consecutive period. These factors have fostered an environment of uncertainty regarding the business’s growth trajectory.
Additional concerns raised by Frasers Group include unfavourable terms of Boohoo’s new £222 million debt facility. The letter asserts that this financial agreement is likely to force the company into drastic actions, such as asset disposals or operational cuts, to meet loan obligations within the next 10 months.
Frasers Group, represented by company secretary Robert Palmer, expressed frustration over Boohoo’s board being unresponsive to suggested alternatives during refinancing talks. The correspondence accuses the board of neglecting to effectively manage the company’s operations and investments.
The proposal to appoint Mike Ashley as CEO is currently under review by the Boohoo board, which acknowledges receipt of the requisition. The board, advised by its consultants, is scrutinising the details and implications of this suggestion, though it has not yet reached a decision.
The ongoing leadership evaluation at Boohoo marks a critical period of potential transition in its executive management.
