Frasers selects new Boohoo choice after Mike Ashley is rejected

Frasers will nominate a new candidate to join Boohoo’s board after the retailer’s shareholders rejected the appointment of founder Mike Ashely last week.

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

Ashley’s company, which has been pushing for an urgent change of leadership at troubled Boohoo, said on Monday it “respects the views of the independent shareholders” and would take up Frasers’ offer to put forward an alternative candidate.

It added: ‘We will put forward a highly qualified candidate in due course and fully expect the Boohoo board to fulfill its commitment without hesitation or delay.’

Boohoo shares have fallen by about 20 percent in the past year and almost 90 percent in the past five years, as the fast fashion retailer has faced declining sales, large losses and an uncertain balance sheet.

The group recently appointed Debenhams boss Dan Finely as CEO of Boohoo in a bid to get the business back on track.

But Frasers has accused Boohoo bosses of overseeing ‘massive value destruction and long-term and persistent incompetence’, as well as a failure to ‘engage meaningfully with shareholders’.

Boohoo, for its part, accuses Frasers of pursuing self-interest at the expense of other shareholders.

In a separate statement, Boohoo also announced the sale of its London office on Monday, with the proceeds used to pay off a loan due in August next year.

The group has agreed to the £49.5 million cash sale of its office in Great Pulteney Street, Soho to property fund Global Holdings UK.

Boohoo said: ‘The action taken to divest this non-core and non-strategic asset will further strengthen the company’s balance sheet.

‘This gives the company a revolving credit facility of £125 million, which is sufficient to meet future needs.’