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Sportswear tycoon Mike Ashley has demanded to be installed as chief executive of Boohoo, claiming the fast-fashion retailer is being “mismanaged”.
Ashley’s Frasers Group, formerly Sports Direct, built a stake in Boohoo last year and is its largest shareholder with about 27 per cent of the shares.
In a letter to Boohoo’s board it said the company “urgently needs to address the management of its business” and that it sought to appoint Ashley as chief executive.
Boohoo, which said last week that chief executive John Lyttle would step down as it announced a strategic review of its operations and a £222mn debt refinancing, urged shareholders “to take no action” as it reviewed Frasers’ demands.
Frasers said in its letter that “there is no stronger candidate for CEO who has the experience and abilities of Mr Ashley and who is in a position to replace Mr Lyttle as soon as possible”.
It cited previous correspondence in which it requested an in-person meeting with Mahmud Kamani, executive chair and co-founder of Boohoo, to discuss its demands for a seat on the board, which it said was ignored.
“We recognise stonewalling when we see it, and these tactics of ‘delay and ignore’ are no longer tolerable in the context of the continued value destruction that the board is overseeing at Boohoo,” Frasers said.
Boohoo shares have plunged more than 90 per cent since their peak in mid-2020 when the retailer was buoyed by a boom in online shopping during the pandemic. Since then, it has had to contend with more subdued demand and higher day-to-day costs from factors including returns, as well as increased competition from rivals such as Shein and Temu.
Clive Black, head of consumer research at Shore Capital, said: “This could be a bit of a blockbuster event, making the Mulberry duel with Challice look very tame.”
Frasers on Wednesday walked away from luxury handbag maker Mulberry after two spurned takeover offers.
Although it still owns about 37 per cent of the British brand, Mulberry’s majority shareholder Challice, controlled by billionaire property tycoon Ong Beng Seng and his wife Christina, said it was not interested in selling the business.
Ashley stepped back from Frasers in 2022, handing the reins of the FTSE 100 group to his son-in-law Michael Murray, who serves as its chief executive.
His company previously lost a battle with Boohoo for control of Debenhams after the department store’s collapse in 2019.
Frasers also gatecrashed Boohoo’s deal to buy ailing fashion rival Missguided in 2022, and bought competitor I Saw It First, set up by Kamani’s brother.
Frasers has been highly acquisitive over the years and owns a stable of brands including Evans Cycles, Jack Wills and House of Fraser.
