Online fashion retailer boohoo’s board has responded to accusations from Frasers Group, asserting that the latter is acting in “self-interest” rather than considering the welfare of all shareholders.
This spiteful exchange comes as Frasers, which holds a 27% stake in boohoo, has called for public assurances regarding asset disposals, including the Debenhams and Karen Millen brands.
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In an open letter, Frasers demanded that boohoo confirm it will not dispose of any assets without prior shareholder approval.
The letter also accused boohoo of attempting to “block the say of shareholders” and insisted that any disposal of assets should be contingent upon shareholder consent.
boohoo’s latest response indicated that it anticipates the ongoing review of options will take several months, and that it will update shareholders with full transparency at the appropriate times.
This situation also follows boohoo’s appointment of Dan Finley, former chief executive officer of Debenhams, as its new chief executive.
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By GlobalDataFrasers has described this decision as “rushed” and has been advocating for the installation of its founder Mike Ashley in the role after the previous chief executive officer resigned in October.
boohoo clarified its stance on Ashley’s potential appointment, stating it “has been clear with Frasers that it will only offer a seat for an appropriate nonexecutive director”.
The board further noted that it has repeatedly sought assurances from Frasers regarding Ashley’s interests and his role in competing businesses, but these requests remain unfulfilled.
Last month, boohoo initiated a process aimed at unlocking and maximising shareholder value through a comprehensive review of options for its main divisions.
The company says it is at the initial stages of determining strategies to enhance value for all shareholders while maintaining high standards of corporate governance throughout this process.
The board believes boohoo is fundamentally undervalued and sees this review as the best approach to serve all shareholders.
Additionally, in its interim results, the company plans to provide more detailed information about its core brands.
“The board remains committed to open and transparent engagement with all of its shareholders, including Frasers and that it is fully aware of, and is continuing to act in accordance with, its duties. The board is also committed to ensuring it takes the right steps to drive the group in the interest of all shareholders and not just Frasers’ self-interest,” the board’s statement reads.
In May this year, boohoo reported that its statutory pretax loss widened by 69.2% to £159.9m ($199.7m) in the fiscal year 2024, from the previous year’s loss of £90.7m.
