Boohoo Group is urging its shareholders to reject Mike Ashley’s board proposals ahead of a crucial meeting on 20 December.
- Institutional Shareholder Services (ISS) has advised against appointing Ashley and Lennon to Boohoo’s board.
- ISS has raised concerns about potential conflicts of interest and the superficial engagement of Mike Ashley with Boohoo’s operations.
- Boohoo’s leadership emphasises a focused strategy under new CEO Dan Finley to drive shareholder value.
- Frasers Group’s attempts at control may be hindered by its declining sales performance.
Boohoo Group has once more rallied its shareholders to dismiss proposals for board appointments suggested by Frasers Group’s Mike Ashley, ahead of their decisive general meeting on 20 December. Institutional Shareholder Services (ISS), an independent advisory firm, has also recommended that shareholders oppose these resolutions. ISS has criticised the involvement of the Sports Direct owner, referring to their perspective on Boohoo’s performance as superficial, while also highlighting possible conflicts of interest related to the proposed candidates.
Furthermore, ISS remarked upon Frasers’ lack of concrete plans for change, reinforcing its stance against the proposed appointments. Boohoo’s board has been engaged in a comprehensive business review under the direction of newly appointed CEO Dan Finley, who has articulated a cogent plan to enhance shareholder returns. The retailer previously denounced Mike Ashley’s ventures as maneuvers to serve commercial self-interests.
Tim Morris, Chairman of Boohoo, expressed gratitude for ISS’s support, aligning with their own recommendation to reject Frasers Group’s propositions. He stated, “The Board of Boohoo welcomes the backing of ISS, aligning with the recommendation we have made to reject the proposals from Frasers Group.” CEO Dan Finley reinforced this sentiment, asserting his belief that the group is fundamentally undervalued. He is determined to restore Boohoo to a leading position in the industry, working closely with Tim Morris and the independent board to secure maximum value for all investors.
Boohoo’s operational challenges have been notable, particularly with the burgeoning competition from fast-fashion behemoths such as Shein and Temu, offering cost-effective clothing globally. Financial results reflect a downturn, with the latest half-year figures indicating a 15% revenue decrease, a 10.5% decline in adjusted operating profit, and a net debt surge exceeding £100 million. Ironically, Frasers Group also faces internal difficulties, with a recent report indicating a revision of their profit projections for the year downward to £550m-£600m after a sharp 33% decline in pre-tax profit along with an 8% reduction in sales for the first half.
The outcome of Boohoo’s shareholders meeting on 20 December will be pivotal in determining the direction of the company’s boardroom dynamics.
