Mike Ashley defeated: What’s next for Boohoo and will Frasers billionaire seek revenge?
Retail tycoon Mike Ashley has experienced a rare taste of defeat after fast-fashion giant Boohoo resisted his attempt to become its new chief executive by tapping the boss of Debenhams.
Dan Finley is to step into the role which is being vacated by John Lyttle whose departure was announced last month.
Mike Ashley’s Frasers Group had tried to install its majority shareholder as the Manchester-headquartered firm’s new CEO after having amassed a 27 per cent stake over recent years.
But while the announcement, which was made to the London Stock Exchange on Friday morning, seems to have settled the question over Boohoo’s leadership, Mike Ashley could still be plotting his next move as the retailer prepares to undergo major changes in the coming months.
When Lyttle’s departure was confirmed, Boohoo also revealed plans for a strategic review, sparking speculation regarding a potential break-up of the business.
That came as Boohoo reported its revenue had dropped by 15 per cent to £620m for the six months to August 31.
New Boohoo boss ‘not a patch’ on Mike Ashley
Russ Mould, investment director at AJ Bell, said: “While relatively young for a CEO at 41, Finley’s background looks solid, having spent a decade as a JD Sports director and then nearly three years helping to transform Debenhams as a digital entity.
“Clearly that’s not a patch on Ashley’s extensive retail experience, but it’s the right type of CV to grab the top job for a company of Boohoo’s size.
“Finley will need some bright ideas to put Boohoo back on the right track. The fact a strategic review is already underway with suggestions that certain brands will be sold means that the new boss can hit the ground running.
“Normally it would take a period of six months for a new CEO to start the job and think about the future structure.
“That doesn’t mean all the big decisions have been made before Finley gets his new office. If anything, he is promoted just at the right time when a lot of preparatory work has been done on each division’s prospects, but he gets to make the final call on where Boohoo goes next.
“The challenge is immense. The previous boss, John Lyttle, spent years trying to fix Boohoo without any success. Finley will need to be creative, have a sharp focus, and think differently to his predecessor.”
Could Frasers Group tycoon hit back?
Mike Ashley has already not been afraid to speak out publicly about what he sees as Boohoo’s shortcomings.
Ahead of the new CEO appointment, the billionaire issued an open letter criticising Boohoo for “the impending £125m of cost savings that were first announced to the market in October 2023”, which “appear to have been eroded by abysmal go-to-market performance.”
The letter added that the group “has lost its ability to manage Boohoo’s business and investments.
Frasers Group also warned that Boohoo’s “debt refinancing are wholly unsatisfactory”, calling it “a backwards [move] for the company and an appalling outcome for shareholders.”
The group also said the £222m debt refinancing facility “almost unquestionably leaves the company in a position of needing to undertake drastic corporate actions..in order to repay the term loan due in 10 months.”
Mould added: “There is also the risk that Mike Ashley flexes his muscles as a major shareholder via Frasers to cause disruption if he doesn’t like the new appointment.
“Ashley isn’t one to mince his words so it will be interesting to get his views on Finley’s suitability for the role.”