Boohoo Group addresses Frasers Group’s CEO proposal, emphasising the importance of governance in leadership decisions.
- Frasers Group suggested appointing Mike Ashley as CEO, following John Lyttle’s resignation plans.
- Boohoo insists it has engaged with Frasers and emphasises governance in CEO selection.
- Boohoo questions Frasers’ portrayal of its recent refinancing actions.
- The board assures shareholders of a careful approach in appointing a new leader.
Boohoo Group has responded thoughtfully to an open letter from Frasers Group proposing Mike Ashley as Boohoo’s new CEO. This proposal follows the announcement of current CEO John Lyttle’s intention to step down. Boohoo has underscored that the appointment of a new CEO is a significant decision for the board, requiring thorough consideration and adherence to proper governance standards.
Frasers Group, holding a 27% stake in Boohoo, expressed dissatisfaction with the board, citing a failure to effectively manage the business and engage with its largest shareholder. Boohoo clarified that it has not delayed or ignored requests and that Frasers’ proposal for Ashley was first mentioned at a recent meeting, despite previously ruling him out for the role.
The company highlighted the importance of Ashley’s substantial interests, given his 73% ownership of Frasers, as well as Frasers’ 23.6% stake in Asos, operating in markets similar to Boohoo. These elements necessitate careful deliberation to safeguard Boohoo’s commercial interests and protect shareholder value.
In relation to the CEO appointment, Boohoo confirmed that the search for a successor to John Lyttle is well underway. The board is committed to sticking to a thorough and structured process before making any final decision, with Lyttle remaining in post until a suitable replacement is found.
Frasers Group also criticised Boohoo’s recent £222m refinancing deal, suggesting it requires drastic corporate actions to meet forthcoming financial obligations. Boohoo countered this by labelling Frasers’ assessment as inaccurate, asserting that the refinancing deal provides clarity for future requirements and has the support of existing banking partners.
The dialogue between Boohoo and Frasers continues, but Boohoo emphasised that they have been open to considering alternative proposals from Frasers, although none have been presented so far.
Boohoo Group remains focused on diligent governance and shareholder interests amid discussions on leadership changes.
