Boohoo Group challenges Frasers Group’s push for influence in its strategic review, labeling it self-serving.
- Frasers owns a significant stake in Boohoo, raising concerns over its conflicting interests with rival investments.
- Boohoo underscores the need for Frasers to assure non-competitive involvement if granted board representation.
- Frasers has pushed for shareholder approval on brand disposals, causing tensions with Boohoo leadership.
- Both companies remain engaged in a heated dispute, with Boohoo seeking governance controls to protect its interests.
In a direct response to Frasers Group’s recent demands for a greater role in its strategic review, Boohoo Group has outlined its concerns. The online fashion leader has criticized Mike Ashley’s company for prioritizing its own benefits over genuine shareholder value. Boohoo has pointed to Frasers’ investments in competitors like Asos and House of Fraser as evidence of the inherent conflict in their interests.
Frasers, which holds 27% of Boohoo, has been vocal about wanting more influence over the company’s strategic decisions. This situation arose during Boohoo’s strategic review, which aims to boost shareholder value and potentially involve the sale of brands such as PrettyLittleThing and Karen Millen. However, Frasers’ actions are perceived by Boohoo as an attempt to manipulate the direction of this review for competition-driven agendas.
In an open letter, Mike Ashley stressed the need for a restriction on brand disposals without shareholder consent. There is speculation that Boohoo co-founder Mahmud Kamani may attempt a buyback at a lowered valuation, a claim that Kamani denies, asserting his focus on maximizing value for all shareholders. Boohoo has called upon Frasers to mirror this commitment or to explain their failure to do so.
Adding to the tensions, Boohoo has rejected Frasers’ request for board representation. The company stated it would only consider appointing an independent non-executive director. Further, Boohoo insists on strict conditions should Frasers seek board involvement to ensure any appointed director from Frasers is uninvolved in Boohoo competitors’ strategic decisions and does not disclose sensitive information.
Frasers has countered Boohoo’s stance by creating a website to rally support among shareholders regarding perceived grievances. Despite the continuing disagreements, Boohoo remains firm in its resolve to impose stringent governance measures to safeguard its business interests.
The conflict between Boohoo and Frasers Group underscores the complexities of shareholder dynamics in competitive industries.
