Frasers Group, led by Mike Ashley, has issued a set of demands to Boohoo following an unsuccessful bid to appoint Ashley as the new CEO of the fast-fashion firm.
Despite owning a 27% stake in the Manchester-based Boohoo, Frasers Group saw its efforts thwarted when Boohoo appointed the CEO of Debenhams, a brand it acquired from administration, as reported by .
In a forthright open letter, Frasers Group has urged Boohoo's board to pledge not to proceed with any disposals without shareholder consent and without advice from an independent global adviser or investment bank. This comes amidst speculation that Boohoo is considering a breakup as part of its recovery strategy.
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‘Boohoo and its shareholders deserve better’
The letter from Ashley's group expressed dissatisfaction with the board's actions: "Frasers Group plc writes to you today to again ask the board to stop, once and for all, its utter disregard for shareholder views. Boohoo and its shareholders deserve better."
The communication continued to highlight Frasers Group's belief in Boohoo's potential and brand quality, while criticising the board's management decisions: "However, the directors have pushed Boohoo into a terrible refinancing, while refusing to engage properly with Frasers on it."
It also condemned the hasty CEO appointment as an attempt to circumvent shareholder input: "They have then rushed out a CEO appointment to try to block the say of shareholders."
"This has to stop. What will they try next? Desperate people do desperate things."
Frasers Group disclosed: "On 31 October 2024, Frasers wrote to the board to express its grave concerns about the board potentially agreeing to dispose of Boohoo's assets."
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The company further stated: "Frasers asked the board to confirm in writing that it would not commence any process or enter into any agreement, whether binding or non-binding, for a disposal of any of Boohoo's assets without first engaging with Frasers on alternative options."
They added that this request was made "This was to ensure that all options for securing best value for shareholders are appropriately reviewed and exhausted."
Highlighting the current challenges faced by Boohoo, Frasers Group pointed out: "Given the market headwinds and commercial difficulties that Boohoo is currently facing, any asset disposals by the company, including of any of its five core brands or the Soho office, would be executed from a position of weakness and unquestionably be at a discounted valuation, and would therefore be wholly unacceptable without prior shareholder approval."
Frasers Group expressed frustration, saying: "The board has refused to meaningfully engage on Frasers' request."
They also noted: "The board has had an opportunity to confirm that it is not intending to make any such disposals, but has not done so."
City AM reports that Boohoo has been approached for a statement on the matter.