Frasers takes another swipe at boohoo as shareholder showdown looms
Shirebrook-based retail giant Frasers Group has ramped up the pressure on the bosses of fast-fashion brand boohoo with another open letter urging shareholders to vote for change at boardroom level.
Frasers, the largest boohoo shareholder, is targeting a pre-Christmas showdown on December 20 to try remove Mahmud Kamani as executive chairman and install Mike Ashley as CEO and restructuring expert Mike Lennon to the board of boohoo, in a move it says will instil a “winning mentality” at the struggling online retailer.
The move comes shortly after boohoo issued a very public snub to Frasers Group by replacing former CEO John Lyttle with new boss Dan Finley.
In the new Frasers letter, the company calls this move “rushed through”. It continues: “Just two weeks after the departure of John Lyttle, the [boohoo] board rushed through the appointment of Dan Finley as boohoo’s new CEO, notwithstanding that he has never led a public company, not least one going through a period of significant trading and
financial uncertainty, and certainly has no track record of creating value for shareholders.
“It is perhaps just a coincidence that Mr. Finley joined boohoo from Debenhams, a business boohoo bought out of administration. This only goes to prove the level of disfunction and poor governance at the board, which is ultimately run by Mr Kamani, for the benefit of Mr Kamani.”
The new letter is the second from Frasers in two weeks. On November 7 it issued a public missive accusing boohoo of “desperation”.
Frasers says it has big plans for boohoo. The letter adds: “Since 2016, Frasers has more than doubled its profits and Mr Ashley plans to bring this same success to boohoo.
“[Frasers will] fix boohoo’s supply chain. The scandals must end once and for all and the current board, led by Mr Kamani, is clearly not in a position to end these.
“We will return a winning mentality at boohoo. Mr Ashley, Mr Lennon and Frasers continue to believe strongly in the potential of the boohoo business and its brands, but change at the top is required to realise this potential.”
In a plea to boohoo shareholders, Frasers said: “It is clear that the Board is clutching at straws in its attempt to try to find reasons not to appoint Mr Ashley and Mr Lennon to the board.
“We ask you, our fellow shareholders to consider this: is the board, and in particular Mr Kamani, worried about what Mr Ashley and Mr Lennon will find?
“Boohoo urgently needs a reset, and the upcoming Shareholder Meeting is your opportunity finally to unlock the company’s incredible potential. Join us in helping boohoo get back on track.”
Meanwhile, this morning boohoo has announced a change in Kamani’s role. He is set to become executive vice chair with immediate effect.
In a statement, the firm said: “The board has decided to divide the role between his executive capacity and his role as the board’s chair, to enable the company to have an independent chair and allow Mahmud to continue his day to day executive role. Mahmud is an integral part of the leadership team and is currently focussed on the group’s young fashion businesses.”
