4 weeks ago
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Yesterday (24 October), Frasers Group published an open letter to Boohoo Group’s board proposing that Mike Ashley be appointed as a director and CEO, following John Lyttle’s intention to step down.
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.
Boohoo Group issued a response this morning "to give clarification on certain matters raised by Frasers".
On board representation, Boohoo Group said it has neither delayed responding to Frasers' requests nor ignored them. The company explained that Frasers' proposal for Mike Ashley to be appointed as a director and chief executive officer was first communicated to Boohoo at an in-person meeting on the evening of Friday 18 October, when Frasers sought to establish a 48-hour deadline.
"This was the first occasion on which Frasers had identified its preferred board candidate, and followed Frasers having formally ruled out Mr Ashley for the role on 9 October 2024, and having previously and consistently indicated that its one nominee would perform a non-executive role," it said.
The company highlighted that Ashley is a 73% shareholder in Frasers, which owns a 23.6% stake in Asos: "Both Frasers and Asos operate in similar markets to Boohoo. These are important facts that need to be taken into account and carefully considered by the board.
"Before any appointment can be made, appropriate governance will be required to protect the company's commercial position and the interests of other shareholders. Boohoo has sought assurances from Frasers in this regard and they have not to date been provided."
On CEO appointment, Boohoo Group said the separate appointment of a new chief executive is "a critical board decision which requires careful consideration and proper governance".
The search process, which started before the meeting with Frasers on 18 October, is "well under way" and John Lyttle will remain in the CEO role until its conclusion, it added.
Frasers Group said in the letter yesterday that Boohoo Group's new £222m debt facility "unquestionably leaves the company in a position of needing to undertake drastic corporate actions in order to repay the term loan due in 10 months". It also criticised Boohoo for its "total lack of willingness to consider alternatives which Frasers proposed to the refinancing".
In response, Boohoo Group described Frasers' characterisation of the company recent debt refinancing as "inaccurate and unfair".
"The refinancing provides certainty for the company around its future requirements and is supported by its existing group of high street banks.
"[It] was discussed on numerous occasions with Frasers and its advisers. As part of those discussions Frasers were advised that the board would be pleased to consider any alternative proposals they might wish to present, but none were forthcoming."
Drapers has approached Frasers Group for comment.
English (US) ·