Frasers Group has voiced concerns over Boohoo’s recent CEO appointment and asset sale plans.
- Frasers demands Boohoo not to sell assets without gaining shareholder approval first.
- Boohoo has appointed Dan Finley as CEO amid criticisms from Frasers.
- Frasers is skeptical about Boohoo’s decision-making and calls their move ‘desperate’.
- The situation underscores tensions between Boohoo and its largest shareholder, Frasers.
Frasers Group has expressed dissatisfaction with Boohoo Group’s recent corporate decisions, particularly the hurried appointment of Dan Finley as CEO. The appointment follows Boohoo Group’s move to replace John Lyttle, amidst unrest about governance from Frasers, the largest shareholder with a 27% stake. Frasers is concerned that the decision was made without substantial input or consideration from other stakeholders.
Through an open letter, Frasers Group urged Boohoo to refrain from selling any assets without prior shareholder approval. They emphasized that any asset disposal should be carefully evaluated and confirmed as ‘fair and reasonable’ by an independent adviser. The stress was on maintaining the interest of Boohoo’s shareholders, deeming any quick sale from a ‘position of weakness’ as unfavorable.
Frasers accuses Boohoo of entering a problematic refinancing situation and failing to engage Frasers effectively in the process. Frasers claims that the decisions, including the CEO’s rushed appointment, were attempts to limit shareholder influence over key actions. ‘Desperate people do desperate things’, remarked Frasers, questioning Boohoo’s hasty strategy choices.
In response to Frasers’ assertions, Boohoo defended its decision-making process as robust and aligned with appropriate governance standards. Boohoo rebutted Frasers’ criticisms of inaccuracy and unfairness, showcasing divergent views within the company’s top echelons about how to proceed in light of current market challenges.
Given the ongoing commercial struggles Boohoo faces, Frasers argues that any asset sales, including key brands or property like the Soho office, would likely result in undervalued transactions if conducted without thorough stakeholder engagement. Frasers maintains confidence that broader shareholder sentiment aligns with their caution and demand for increased oversight.
The unfolding scenario reflects a deepening rift between Boohoo and Frasers, with the latter advocating for heightened shareholder involvement in Boohoo’s strategic decisions.
