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Mike Ashley has called Boohoo’s decision to appoint a CEO from within “desperate”, after the fast-fashion retailer rejected Frasers’ demands to appoint Ashley as leader of the group.Following the internal promotion of Debenhams CEO Dan Finley to lead Boohoo, Ashley told the Sunday Times: “Independent shareholders be warned, desperate people do desperate things.”
Last week, Boohoo announced the appointment of Finley as its new CEO. Finley, who has been with Debenhams for two years, will take up the role with immediate effect.
However, Frasers previously published a letter attacking Boohoo’s management and calling for Ashley to be appointed as a replacement for John Lyttle, Boohoo’s outgoing chief executive.
Last month, Boohoo responded to Frasers’ call to install Ashley as CEO, rebutting claims it has “stone-walled” Frasers over discussions about the appointment, whilst also calling Frasers’ categorisation of its debt refinancing “inaccurate and unfair”.
Frasers Group had called on Boohoo to appoint Ashley as director and CEO of Boohoo after slamming the “continued incompetence” of the current Boohoo board amid an “abysmal” trading performance.
In an open letter to Boohoo, Frasers urged the company to remove outgoing CEO John Lyttle as director and appoint Ashley as chief “without delay”, adding that his appointment would be in the “best interests of the company, its shareholders and its stakeholders”.
The letter also accused Boohoo of “stone-walling” its proposals, adding “these tactics of ‘delay and ignore’ are no longer tolerable in the context of the continued value destruction that the board is overseeing at Boohoo”.
Boohoo rebutted this, however, and said its board has “neither delayed responding to Frasers’ requests for board representation nor ignored them”.
Boohoo also highlighted governance concerns over the proposal, and said: “As shareholders will be aware, Mr Ashley is a 73% shareholder in Frasers; in addition, Frasers owns a 23.6% stake in Asos, and both Frasers and Asos operate in similar markets to Boohoo. These are important facts that need to be taken into account and carefully considered by the board.”
It confirmed that it was still willing to discuss board representation with Frasers “in a constructive manner”, but has been clear with Frasers that before any appointment can be made, “appropriate governance will be required to protect the company’s commercial position and the interests of other shareholders”.
