Mike Ashley, with a 27% stake in Boohoo, demands to be CEO amid a leadership crisis.
- Frasers Group calls for immediate action, nominating Ashley and Mike Lennon as directors.
- Boohoo faces significant challenges, including a recent CEO resignation and poor sales performance.
- Ashley criticizes Boohoo’s recent debt refinancing as unsatisfactory for stakeholders.
- Frasers urges Boohoo to consult major shareholders on significant business decisions.
Mike Ashley, holding a substantial 27% interest in Boohoo, has publicly declared his demand for the role of CEO in an open letter directed at the company’s board. Frasers Group, under Ashley’s control, is pushing for an immediate board meeting to formalize the appointment of Ashley as CEO and Mike Lennon from Kroll Advisory as a board director. This move is presented as a necessary step to address what Frasers describes as a ‘leadership crisis’ following CEO John Lyttle’s announced departure after a five-year tenure.
In light of John Lyttle’s forthcoming exit, Frasers Group insists it has repeatedly suggested experienced candidates for leadership roles to Boohoo’s board, with these overtures having been made on multiple occasions. However, Frasers claims that the board has not engaged meaningfully, with responses only causing delays in resolving the urgent leadership issue, leading Frasers to assume its proposals have been dismissed.
The group criticizes the board for its lack of engagement and points out Boohoo’s troubling financial trajectory, emphasizing a 36.5% drop in sales over three years up to August 31, 2024, and a year-to-date share price decline of over 29%, with a 17% fall in the last quarter alone.
Additionally, Ashley has expressed dissatisfaction with Boohoo’s recent debt refinancing agreement, describing it as a setback for the company and its shareholders. He contends that the terms of the £222 million facility are unfavorable, potentially necessitating drastic measures like asset disposals or operational downsizing to meet the looming repayment deadline in ten months.
With Boohoo contemplating a business reorganization to enhance shareholder value, Frasers stresses the importance of involving all significant shareholders in such strategic decisions, arguing that better outcomes could be achieved if Boohoo cooperatively engaged with major stakeholders, such as Frasers.
Frasers Group highlights the urgency for Boohoo to address its leadership and financial challenges effectively.
