Mike Ashley has publicly criticised Boohoo following their appointment of a new CEO, calling the move ‘desperate’.
- Dan Finley, formerly of Debenhams, has been promoted to CEO of Boohoo, bypassing Ashley.
- Ashley has warned independent shareholders to be cautious, referencing desperation at Boohoo.
- Frasers Group, owning 27% of Boohoo, has expressed dissatisfaction with Boohoo’s recent management decisions.
- A recent refinancing agreement by Boohoo has been labelled unsatisfactory by Ashley, signalling potential shareholder concerns.
Mike Ashley, a prominent figure within Frasers Group, has openly criticised Boohoo’s decision to appoint Dan Finley, previously from Debenhams, as the new CEO. Ashley described Boohoo as ‘desperate’ in an email to The Sunday Times, expressing concern over the company’s leadership decisions.
Despite holding a significant 27% stake in Boohoo, Frasers Group’s suggestions for leadership changes were not heeded. Ashley’s recommendation to take over the CEO role was disregarded, prompting his reaction. He has advised independent shareholders to remain vigilant as, in his words, ‘desperate people do desperate things.’
Boohoo’s management has faced scrutiny from Frasers, who have been vocal about the fashion retailer’s poor performance and significant decline in share price. In a letter, Frasers outlined the urgent need for Boohoo to address what it terms a ‘leadership crisis’. They emphasized the underperformance and the need for immediate management intervention.
The recent approval of a £222 million debt refinancing deal by Boohoo intended to support their growth phase has been criticised by Frasers Group. Ashley has referred to the refinancing terms as ‘wholly unsatisfactory’ and a ‘step backward for the company,’ indicating potential negative implications for shareholders.
These developments mark a challenging period for Boohoo as it navigates its strategic choices under new leadership. The firm’s decisions, especially around financing and leadership, remain under intense scrutiny from one of its largest stakeholders, Frasers Group.
The friction between Frasers Group and Boohoo highlights the ongoing challenges in leadership and strategy within the fast fashion sector.
