Boohoo seeks shareholder backing against Frasers Group’s board appointments.
- Proxy advisors Glass Lewis and ISS advise against Frasers Group’s resolutions.
- Concerns centre around potential conflicts of interest with Mike Ashley’s board appointment.
- Boohoo’s financial challenges highlighted, with a 15% revenue drop.
- Frasers Group’s own financial performance raises questions about its takeover bid.
Boohoo has reiterated its position, urging shareholders to reject Frasers Group’s proposed board appointments in the forthcoming general meeting. This stance is bolstered by recommendations from proxy advisors Glass Lewis and ISS, who have both advised shareholders to vote against Frasers Group’s resolutions. Glass Lewis emphasised potential conflicts of interest, asserting that Mike Ashley’s appointment could jeopardise shareholder interests due to insufficient governance safeguards. The firm further questioned Frasers’ intentions, noting their refusal to address these governance concerns.
Glass Lewis’s recommendations align with the sentiments of Boohoo’s chairman, Tim Morris, who expressed approval of their analysis, highlighting the risks involved in appointing individuals with strong ties to Frasers without adequate governance measures. Boohoo’s CEO, Dan Finley, echoed these thoughts, appreciating the support from Glass Lewis as a reinforcement of Boohoo’s independence and strategic interests, especially amidst challenges from fast-fashion competitors like Shein and Temu. Boohoo reported a 15% drop in revenue and a 10.5% decline in adjusted operating profit, alongside a significant increase in net debt by over £100 million.
While Boohoo faces its financial hurdles, Frasers Group’s financial standing is also under scrutiny. Recent reports indicate a 33% drop in their pre-tax profit, leading to a revised annual profit forecast of £550 million to £600 million. Frasers also reported an 8% decrease in sales in the first half of the year. CEO Dan Finley remains optimistic about Boohoo’s prospects, particularly citing the potential of Debenhams, suggesting that its progress and future opportunities could potentially exceed the current market valuation of the entire Boohoo Group, estimated at over £500 million.
Boohoo continues to defend its boardroom and strategic integrity against Frasers Group’s advances, supported by key proxy advisors.
