Boohoo has fiercely responded to Frasers’ attempt to influence its board structure, calling the rival’s actions “desperate.”
- Frasers accused Boohoo of using governance concerns to block director appointments.
- The latest dispute centers on competition and governance claims.
- Frasers argues Boohoo’s governance demands are excessive.
- Proxy advisor Glass Lewis suggests shareholders reject Frasers’ proposals.
Boohoo has delivered a stern response to Frasers, dismissing their latest overture aimed at reshaping Boohoo’s board by describing the rival’s actions as “desperate.” This confrontation arose following Frasers’ open letter to shareholders, where it labeled Boohoo’s cited governance and competition issues as “grossly exaggerated.” Frasers insists that Boohoo is using these claims as a “thinly-veiled excuse” to prevent the appointment of Mike Ashley and Mike Lennon to its board.
Frasers argues that Boohoo presented an exaggerated list of governance requirements as a barrier. According to Frasers, these demands lack legal backing or alignment with corporate norms. The firm criticized Boohoo for overstepping with requirements that, in Frasers’ view, are neither reasonable nor necessary.
Frasers further maintained that Boohoo privately acknowledged the potential of Mike Ashley’s leadership and experience, which they believe would greatly benefit all Boohoo shareholders. Addressing competition concerns, Frasers stated there is “virtually no overlap between the two businesses,” noting that House of Fraser might compete with Boohoo’s Debenhams, yet emphasizes the distinction in market positioning, with House of Fraser considered more upmarket.
In defense of its stake in Asos, Frasers asserted that it operates under the same information restrictions applicable to any shareholder, dispelling notions of insider influence. They argue that their minority holding in Asos poses no competitive threat to Boohoo.
As Boohoo’s shareholders prepare to vote on Frasers’ board appointments, proxy advisor Glass Lewis has advised against supporting the proposal, suggesting that the addition of Mike Ashley and Mike Lennon could be detrimental. Despite Boohoo’s recent performance struggles against fast-fashion giants like Shein and Temu, the company stands firm against Frasers’ board ambitions.
Frasers, holding 27% of Boohoo’s shares, previously demanded a leadership overhaul, calling for Mike Ashley to become chair and Mike Lennon as a director. Frasers argued this infusion of leadership could reverse Boohoo’s challenging performance, marked by disappointing results and issues in transparency and supply chain management.
The ongoing debate highlights the stark differences in corporate strategy and governance perspectives between Boohoo and Frasers.
