Frasers calls for meeting over Boohoo “crisis”, wants Mike Ashley to be new CEO

Frasers Group has ended its interest in taking over Mulberry but now it’s turning its full attention to underperforming Boohoo Group in which it has a roughly 27% stake.

And on Thursday it published an open letter calling for a general meeting of Boohoo to appoint Frasers’ controlling shareholder Mike Ashley as a director and CEO of Boohoo “to take effect without delay”.

Boohoo replied that it’s “in the process of reviewing the content… with its advisers.  A further announcement will be made in due course”.

Frasers said this is “now the only way to set a new course for Boohoo’s future. The letter talked of “Boohoo’s leadership crisis” but said Frasers continues “to believe strongly in the potential of the business. However, the company urgently needs to address the management of its business”.

It added: “In addition, the impending £125 million of cost savings that were first announced in October 2023 appear to have been eroded by abysmal go-to-market performance. Boohoo’s  announcement on Friday, 18 October 2024 failed to reference any  costs savings at all.

“The board has lost its ability to manage Boohoo’s business and investments”.

And it complained that the recently announced debt refinancing is “a step backward for the company and an appalling outcome for shareholders” given the short-term nature and cost of the package.

“Had Boohoo engaged constructively with Frasers on the refinancing, alternative solutions could have been fully explored which may have resulted in a more favourable outcome for all stakeholders,” it said.

Frasers also said it “would like to make absolutely clear that no [brand] disposals should be made without first consulting Frasers and all other major shareholders”.

The company complained about not having been able to engage directly with Boohoo executive chairman Mahmud Kamani and that it hasn’t received a response to its proposal for Ashley to become CEO in light of current CEO John Lyttle’s decision to leave.

Frasers is concerned about a “leadership void [that’s] an impediment on Boohoo’s return to growth. Finding a replacement  who can not only reinvigorate the company, but also deliver best-in-class operational oversight, will be very difficult to achieve in the near term. Appointing Mr. Ashley as a director and CEO of Boohoo is the best solution”.

The company also wants Mike Lennon to become a director of the company. He’s “an experienced restructuring professional with significant experience in retail assignments”.