The battle for Boohoo heats up: Ashley demands the removal of the founder and two seats on board
Mike Ashley has been asked by Boohoo co-founder Mahmud Kamani to step aside as tensions rise between two of the retail industry’s most prominent figures.
The troubled fashion group announced yesterday that Kamani has left his role as executive chairman to become executive vice chairman.
But the move, which saw Boohoo insider Tim Morris promoted to chairman, failed to calm Ashley’s anger. His Frasers Group is Boohoo’s largest shareholder and has pushed for change.
Boohoo said Mahmud Kamani (right) has left his role as executive chairman to become executive vice-chairman, but Mike Ashley (left) is demanding he resign
Morris said he would focus on “delivering maximum value for and protecting the interests of all shareholders.” He pointed to £39.3 million in new funding as a sign he can engineer a revival.
And Kamani, who founded the Manchester retailer in 2006, will forego his salary for a year. He has also pledged not to try to buy Boohoo or any of its assets.
But Frasers said the reshuffle made little difference. A spokesperson said: “His title may have changed but his handle has not. Mr. Kamani must go.”
It added: ‘Shareholders have lost money and there is legitimate disappointment and distrust of the current leadership, in particular Mr Kamani.’
Frasers is pushing for Ashley and restructuring expert Mike Lennon – a close ally of the tycoon – to be given seats on Boohoo’s board.
Shareholders will vote on the proposal on December 20. Frasers, controlled by Sports Direct tycoon Ashley, owns 28 percent of Boohoo, while Kamani owns 12.6 percent.
A ruthless takeover specialist, Ashley has expanded his retail empire from one store in Maidenhead, Berkshire, to an estate including Game, Jack Wills and Agent Provocateur.
He tried to install himself as CEO, but Boohoo appointed insider Dan Finley this month. Boohoo has urged investors to reject Ashley’s claims, saying he is promoting “commercial self-interest”.
“The board has a credible plan to unlock and maximize value for all shareholders,” Boohoo said last week.
A ‘make or break’ review set the tone for the company’s breakup. It has thrown into doubt the future of brands such as Oasis and Coast, which could be spun off or sold.
Russ Mould, investment director at AJ Bell, said: ‘It is unlikely that Kamani will bow to Frasers’ demands and leave without a fight. He helped build the company and quickly make it one of the biggest forces in the country.
“Although Boohoo has lost its way, it is incomprehensible that Kamani would allow someone else to step in and put the company back together in a different way. It would be an admission of failure.”
Maximizing its appeal to trendy young shoppers, Boohoo took its shares to a high in 2020 during lockdowns, when it was valued at more than £5 billion.
But the business has suffered from fierce competition from rivals such as Shein.
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