Boohoo hits out at Ashley’s Frasers Group again as public spat deepens
Boohoo has accused Mike Ashley’s Frasers Group of waging a campaign to “destabilise” and “disrupt” the company today in the latest salvo of a protracted spat between the two retail giants.
In a letter to shareholders, Boohoo urged them to vote against Ashley’s efforts to install himself on Boohoo’s board and said Frasers is “acting only in its own commercial self-interest and not in the interests of other Shareholders”.
“This is not the first time Frasers has acted in this way: shareholders are again reminded of the precedent situation at Studio Retail Group plc where Frasers used its shareholding of just under 30 per cent to exert significant pressure on the existing management team,” Boohoo wrote.
“This included attempts by Mike Ashley to be appointed as Chairman of the board and a separate shareholder requisition with the objective of installing Benjamin Gardener to the board. The business of Studio Retail Group was then put into administration.”
Boohoo pointed again to the position of proxy adviser group ISS, which yesterday recommended shareholders reject Ashley’s latest bids to win board seats.
It marks the latest in a months’ long battle between the two after Boohoo’s chief executive, John Lyttle, stepped down in October.
Frasers, which owns some 27 per cent of the company, made a play to install Ashley as his successor but was rejected. Former Debenhams chief Dan Finley was appointed to the role.
However, shareholders will now have a chance to vote on whether to appoint Ashley and restructuring specialist Mike Lennon to the board on 20 December.
Ashley has said he will help put the company on a firmer footing after a troubling period in which profits have dived and rivals like Shein have made in roads into the market.
“As a board member, I would bring the fresh ideas, constructive support, and the much-needed accountability Boohoo desperately needs,” Ashley said over the weekend.
He also stressed that he does not want Boohoo to sell Debenhams and the company must avoid selling its assets on the cheap. He said Frasers’ commitment to support the company with its financing issues “will avoid the need for a fire sale”.
In an open letter published on Sunday, Ashley said: “It’s a weak and self-serving defence driven by an egotistical founder who has an unhealthy grip on the board, and one designed to play on fear and protect the status quo.”