Boohoo Group CEO vows to ‘find solution’ to Frasers Group demand

This morning (1 November), Boohoo Group announced announced that it has appointed Debenhams chief executive Dan Finley as its new CEO, to succeed John Lyttle, a week after its biggest shareholder Frasers Group pitched Mike Ashley for the role.

Finley has been CEO of Debenhams since January 2022 after Boohoo Group acquired its brand name and website out of administration for £55m. Prior to that, he spent a decade at JD Sports Fashion as group multi-channel director.

His appointment came after Frasers Group published an open letter proposing that Ashley be made director and CEO of Boohoo Group, on 24 October.

The letter went on to say that “the board has lost its ability to manage Boohoo’s business and investments” and there has been “a complete failure to meaningfully engage” with Frasers, its biggest shareholder with a 27% stake.

On 25 October, Boohoo Group responded robustly to Frasers’ demands, stating that a CEO appointment is a critical board decision that “requires careful consideration and proper governance”.

Speaking to Drapers following his appointment today, Finley said: “We absolutely want to engage [with Frasers Group]. We will try and find a solution.

“I'm a few hours into the role. I'm looking forward to engaging with all of our shareholders and all of our stakeholders.”

CFO Stephen Morana added the company is continuing to explore options on Frasers' requests for board representation: “It's always difficult when you've got a competitor. Practically, [we are thinking about] what kind of information they could get or who that person would be.

“But in principle, we acknowledge they're a big shareholder and we need to make them feel comfortable that we're doing the right thing for them and for all of them. So we'll try and find a solution that works.”

Boohoo Group previously highlighted that Ashley is a 73% shareholder in Frasers, which owns a 23.6% stake in Asos.

“Before any appointment can be made, appropriate governance will be required to protect the company’s commercial position and the interests of other shareholders," said a Boohoo Group statement.

“Boohoo has sought assurances from Frasers in this regard and they have not to date been provided.”

On 18 October, when Boohoo Group announced the resignation of CEO John Lyttle, it also unveiled a strategic review “to unlock and maximise shareholder value”, raising the prospect of a break-up of the group.

When asked about the review, Finley said: “We've started a process just recently. It's day one in my new role and my job is to lead that process going forward so we can understand what the best options are for the benefit of all shareholders. I don’t want to pre-judge it. It's underway and we look forward to engaging with relevant parties on that.”

The business did not disclose the appointment process, but Morana described Finley as “a natural CEO waiting in the business [who] has been highlighted on that succession route a long time ago”.

His appointment comes as the business hailed Debenhams’ transformation to a “capital-light, stock-light and cash-generative” fashion marketplace with 10,000 brand partners and a GMV (gross merchandise value) annual run rate, which projects the annual sales on the site, of £800m.

In September, Debenhams unveiled plans to launch international websites in Ireland and Australia before Christmas as part of an expansion drive.

Finley confirmed that he will continue to run Debenhams as part of his wider group chief executive responsibilities: “I'm confident that we can do everything that we need to continue to drive Debenhams forward and create significant value there, but also to unlock the significant value that we see across a wider group for the benefit of all shareholders and stakeholders.

“We've done a lot of work with our fashion labels over the course of the last year or so to pivot them into fashion-led marketplaces, which has been successful, and we see a broader marketplace opportunity across the group going forwards.”

The company is due to publish its results for the six months to 31 August in early November.