Frasers Group has issued an open letter to Boohoo, emphasising its demand for shareholder approval before any asset sales.
- Frasers criticises Boohoo’s board for a lack of shareholder engagement and expresses concern over the current financial strategies.
- The group highlights the urgency of hiring independent advisers to ensure fair terms amid Boohoo’s strategic review.
- Frasers stresses that any disposal of Boohoo’s core assets should not occur without exploring all shareholder value options.
- Mike Ashley’s attempt to influence Boohoo’s leadership decision was met with resistance, leading to public demands.
In a move that underscores the tension between two prominent companies, Frasers Group has publicised its scepticism towards Boohoo’s recent strategic decisions. Frasers argued that any asset sales by Boohoo must receive shareholder approval, as the lack of such a process reflects poorly on corporate governance. The letter accuses Boohoo’s board of displaying ‘an utter disregard for shareholder views’, insisting that stakeholders deserve better oversight and transparency.
The unilateral decisions of Boohoo’s directors, particularly concerning refinancing deals and CEO appointments, have sparked controversy. Frasers claims that these moves are designed to bypass shareholder influence, following the recent appointment of Debenhams boss Dan Finley as Boohoo’s CEO. This decision reportedly occurred without adequate shareholder consultation, which Frasers sees as an avoidance of proper procedure. The group asserts, ‘This has to stop. What will they try next? Desperate people do desperate things.’
Adding to the discourse, Frasers has established a website, www.boohoodeservesbetter.com, aimed at informing Boohoo’s shareholders about Frasers’ perspective on the current leadership and strategic crisis. The site is intended to consolidate support for Frasers’ call for more robust governance mechanisms within Boohoo. Frasers’ concerns were initially communicated through a letter last week, highlighting displeasure over Boohoo’s strategic review’s implications, which could involve a divisive breakup of its brand portfolio.
Frasers has reiterated its position, advocating for a comprehensive review of all possible strategies to secure maximum shareholder value before proceeding with any asset disposal. In a climate of economic challenges and Boohoo’s current commercial struggles, Frasers maintains that selling assets from a position of weakness would inevitably result in discounted valuations.
Previous overtures by Mike Ashley to assume the CEO role were rejected, a decision met with public criticism from Frasers. The pattern of decision-making, including the rejection of alternative options proposed by Frasers, is presented as indicative of governance shortcomings that could undermine shareholder interests.
Frasers’ insistence on shareholder engagement in Boohoo’s strategic decisions highlights a significant governance conflict within the fashion industry.
