Boohoo has responded to Mike Ashley's Frasers Group following the open letter released yesterday, which declared an intention to appoint him as the new chief executive, as reported by .
The fashion retailer which is headquartered in Manchester, sought to provide "clarification" on issues highlighted by Frasers, including allegations of "long-term mismanagement" resulting in "value destruction".
Frasers, in its correspondence to Boohoo, described a "leadership crisis" within the company and criticised Boohoo's debt refinancing strategies as "debt refinancing are wholly unsatisfactory", labelling them a regressive step for the business and a dreadful result for shareholders.
The group also pointed to the significant drop in Boohoo's share price, noting a nearly 30 per cent fall year-to-date and a 17 per cent decrease over the past three months.
Moreover, Frasers accused Boohoo of disregarding requests for meetings, stating: "We recognise stone-walling 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."
In retaliation, Boohoo asserted that its board had not procrastinated in replying to Frasers' demands for board representation, nor had it dismissed them.
Boohoo disclosed that Frasers' proposal to install Ashley as CEO was first mentioned on Friday 18 October, expressing concern over Ashley's significant 73 per cent stake in Frasers.
Moreover, Frasers holds a 23.6 per cent stake in competitor ASOS, and the company highlighted that both Frasers and ASOS operate in markets similar to Boohoo's.
"These are important facts that need to be taken into account and carefully considered by the board," the firm stated.
Boohoo further noted that it had been open to meeting "in a constructive manner", but the company had "been clear with Frasers that before any appointment can be made, appropriate governance will be required to protect the company's commercial position and the interests of other shareholders."
"Boohoo has sought assurances from Frasers in this regard and they have not to date been provided," it declared.
The company also said "Frasers' characterisation of Boohoo's recent debt refinancing is inaccurate and unfair", asserting that the move "provides certainty" for the company regarding its future needs and is backed by its existing group of high street banks.
