Mike Ashley’s Frasers Group warns Boohoo over break-up plans
Mike Ashley’s Frasers Group has handed Boohoo a list of demands after its campaign to install the retail tycoon as the new CEO of the fast-fashion giant failed last week.
The owner of Sports Direct and House of Fraser had sought to get Mike Ashley installed as the new chief executive of Manchester-headquartered Boohoo, in which Frasers Group owns 27 per cent.
However, Boohoo defied the move and instead tapped the CEO of Debenhams, which it has owned since buying the brand out of administration.
Now in an open letter, Frasers Group has called on Boohoo’s board to confirm that it would not make any disposals without shareholders approving the move and without confirmation from an independent global adviser or investment bank.
The demand also comes amid talk of Boohoo preparing to break itself up as it works on a turnaround plan.
‘Boohoo and its shareholders deserve better’
In the letter, the retail tycoon’s group said: “Frasers Group plc writes to you today to again ask the board to stop, once and for all, its utter disregard for shareholder views. Boohoo and its shareholders deserve better.
“We continue to believe strongly in the potential of the Boohoo business and the quality of its brands.
“However, the directors have pushed Boohoo into a terrible refinancing, while refusing to engage properly with Frasers on it.
“They have then rushed out a CEO appointment to try to block the say of shareholders.
“This has to stop. What will they try next? Desperate people do desperate things.”
Frasers Group added: “On 31 October 2024, Frasers wrote to the board to express its grave concerns about the board potentially agreeing to dispose of Boohoo’s assets.
“Frasers asked the board to confirm in writing that it would not commence any process or enter into any agreement, whether binding or non-binding, for a disposal of any of Boohoo’s assets without first engaging with Frasers on alternative options.
“This was to ensure that all options for securing best value for shareholders are appropriately reviewed and exhausted.
“Given the market headwinds and commercial difficulties that Boohoo is currently facing, any asset disposals by the company, including of any of its five core brands or the Soho office, would be executed from a position of weakness and unquestionably be at a discounted valuation, and would therefore be wholly unacceptable without prior shareholder approval.
“The board has refused to meaningfully engage on Frasers’ request.
“The board has had an opportunity to confirm that it is not intending to make any such disposals, but has not done so.”
Boohoo has been contacted for comment by CityAM.