Boohoo shareholders vote against Mike Ashley as the fast fashion soap opera continues

Frasers Group’s attempts to place Mike Ashley on the board of struggling online retailer Boohoo have failed resoundingly.

Boohoo shareholders rejected two resolutions at a general meeting in Manchester on Friday that would have appointed Ashley and his colleague, insolvency expert Mike Lennon, to director positions.

Only about 36 percent of votes cast in both resolutions supported Ashley and Lennon’s respective nominations, with the remaining 63.8 percent opposed.

Proxy advisors ISS and Glass Lewis, like Boohoo’s board, opposed their appointment, partly due to concerns about governance and conflicts of interest.

Boohoo, owner of Dorothy Perkins and PrettyLittleThing, last week offered to give Frasers one board seat – as long as it wasn’t Ashley or Lennon.

But Frasers believed the two men’s leadership was needed to turn around Boohoo, whose shares have fallen by about 90 percent in the past five years.

In a letter dated Octoberthe FTSE 250 company accused Boohoo bosses of overseeing ‘large-scale value destruction and long-term and ongoing incompetence’.

It also alleged that the Manchester-based company had engaged in ‘delay and ignore’ tactics by failing to ‘meaningfully act on’ its proposals for board representation.

The letter was published in October after John Lyttle announced he would be stepping down as CEO of Boohoo after a tumultuous five years in charge.

But rather than take up the proposal to appoint Ashley, Boohoo decided instead to appoint Debhams boss Dan Finley as Lyttle’s replacement.

Commenting at Friday’s shareholders meeting, Finley said: ‘Our group is a dynamic company, with great brands and extremely talented people, supported by best-in-class infrastructure.

“Since my appointment, I have hit the ground running and taken immediate and decisive action to maximize and unlock value for all shareholders.

‘I have a lot of energy to realize the significant opportunities I see for this company. I continue to believe that this group is materially undervalued.

“Our most important work is ahead of us, and we will create value for all shareholders.”

Like many other e-commerce companies, Boohoo experienced breakneck growth during the early part of the Covid-19 pandemic, as governments imposed strict restrictions on trading in ‘non-essential’ stores.

Sales then slowed significantly after restrictions were eased, before falling due to cost of living pressures and growing competition from Chinese fast fashion retailers Shein and Temu.

In the last financial year, the group’s turnover fell by more than £300 million to £1.5 billion, while pre-tax losses soared 76 percent to £159.9 million.

Boohoo Group shares were 1.6 percent higher at 33.3p late on Friday afternoon Frasers Group shares were 4 percent higher at 634p.