Boohoo rejects claims it ‘ignored’ Frasers during leadership battle
- Frasers published a letter accusing Boohoo of failing to ‘engage meaningfully’
- The FTSE 100 company urged Boohoo to appoint Mike Ashley as CEO
Tension: Boohoo has denied claims it ‘delayed and ignored’ Frasers Group’s proposals for board representation
Boohoo has denied claims that it ‘delayed and ignored’ Frasers Group’s proposals for board representation.
Frasers published an open letter on Wednesday accusing Karen Millen’s owner of ‘stonewalling’ and not being ‘meaningfully involved’ in the issue.
The FTSE 100 company, whose brands include Sports Direct, Slazenger and Jack Wills, urged Boohoo to replace John Lyttle as CEO with retail magnate Mike Ashley.
According to the company, this is the ‘best solution’ to the company’s ‘leadership crisis’, but Boohoo is reportedly considering Umar Kamani, son of founder Mahmoud, to succeed Lyttle.
In its letter, Frasers says it wrote a letter on October 9 requesting a personal meeting with Mahmud Kamani to discuss leadership matters “as soon as possible.”
The group claimed that Boohoo ‘completely ignored’ the suggestions in its initial response, but offered to meet shortly afterwards, which eventually took place on October 18.
Frasers wrote: ‘At this meeting we asked for an explanation of the completely inconsistent and contradictory responses we had received from Boohoo to Frasers’ proposal for representation on the board. No satisfactory explanation was given.”
The Derbyshire-based company requested a response to its proposal to appoint Mike Ashley on October 20.
However, on Wednesday it wrote: ‘Instead, we have received persistent responses resulting in further delays in a situation where time is of the essence.
“Frasers therefore has no choice but to assume that the board has rejected Frasers’ proposal for board representation.”
However, Boohoo said it had ‘not delayed responding to Frasers’ requests… nor had it ignored them’.
The Manchester-based company also claimed that Frasers had ‘formally excluded’ Mr Ashley from the role of CEO on October 9.
Still, it said Frasers’ desire for Ashley to be nominated for the position was “first communicated” at last Friday’s meeting.
In addition, Boohoo noted that Ashley had a majority stake in Frasers, which in turn owned a 23.6 percent stake in rival online clothing retailer ASOS.
Boohoo said: ‘It is clear at Frasers that before an appointment can be made, appropriate governance will be required to protect the commercial position of the company and the interests of other shareholders.’
Both Asos and Boohoo saw huge growth during the early stages of the Covid-19 pandemic, when the temporary closure of fashion stores prompted Brits to buy their clothes from e-commerce retailers.
Over the past two years their sales have slowed and reversed significantly due to returning customers to the stores, cost of living pressures and significant competition from the likes of Chinese rival Shein.
Boohoo shares were up 1.75 percent at 8 p.m. mid-Friday afternoon Frasers Group shares were 0.25 percent higher at 796.5p.
DIY INVESTMENT PLATFORMS
A.J. Bell
A.J. Bell
Easy investing and ready-made portfolios
Hargreaves Lansdown
Hargreaves Lansdown
Free fund trading and investment ideas
interactive investor
interactive investor
Invest for a fixed amount from € 4.99 per month
Sax
Sax
Get £200 back in trading fees
Trade 212
Trade 212
Free trading and no account fees
Affiliate links: If you purchase a product, This is Money may earn a commission. These deals have been chosen by our editors because we believe they are worth highlighting. This does not affect our editorial independence.