The dispute between Boohoo and Frasers intensifies as governance issues take centre stage.
- Boohoo defends its position against Frasers’ shareholder letter, describing actions as ‘desperate.’
- Frasers criticises Boohoo’s governance demands, calling them unprecedented and lacking legal basis.
- Boohoo’s advisor opposes appointments of Mike Ashley and Mike Lennon, citing adverse shareholder impact.
- Upcoming shareholder vote looms, with Boohoo’s opposition to Frasers’ nominees at the forefront.
In a significant escalation of tensions, Boohoo has publicly criticised Frasers’ recent open letter to shareholders, categorising it as a ‘desperate’ move. The controversy arises from Boohoo’s rejection of Frasers’ proposed board appointments, which includes well-known figures like Mike Ashley. According to Boohoo, the concerns raised by Frasers are merely exaggerated pretexts to influence board composition.
Frasers, on the other hand, has accused Boohoo of proposing excessive governance requirements that are neither legally mandated nor aligned with standard corporate practices. The sports retail giant suggests that these stipulations are strategically designed to sideline its candidates, particularly Ashley, whose experience is portrayed as beneficial to all shareholders.
Addressing competition concerns, Frasers argues that its role within the market does not conflict with Boohoo’s interests. It asserts there is minimal business overlap, referencing the distinct market positions of House of Fraser and Boohoo’s Debenhams. Furthermore, Frasers mentions its substantial 21% shareholding in Asos, clarifying that it lacks special access beyond that of a typical shareholder.
The dynamics of this corporate struggle are underscored by Boohoo’s advisory firm, Glass Lewis, which has guided shareholders to oppose the appointments of Ashley and Lennon. The advisory firm believes these changes would not serve shareholders’ best interests, framing Boohoo’s resistance as a stance against what it perceives as detrimental appointments.
As the December 20th shareholder meeting approaches, Boohoo remains firm in its resolve against Frasers’ nominees. Despite Boohoo’s recent struggles amid the competitive fast-fashion sector, it continues to resist pressure from its substantial 27% stakeholder, Frasers, which is advocating for a strategic overhaul to address poor financial results and transparency issues.
The upcoming vote will determine the future leadership dynamics at Boohoo amid ongoing disputes with Frasers.
