Frasers accuses boohoo of desperation in new open letter

The spat between retail giant Frasers Group and Manchester online fashion retailer boohoo has escalated after the Shirebrook firm published an open letter on Wednesday (November 6) accusing its rival of “desperation”, while revealing it has set up a dedicated website outlining its concerns.

The move comes after boohoo installed former JD Sports man Dan Finley as its new CEO last week, snubbing efforts by Frasers, a major shareholder in the firm, to install Mike Ashley as the new boss.

The letter to boohoo shareholders begins: “Frasers Group 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.

We continue to believe strongly in the potential of the boohoo business and the quality of its brands. However, the directors have pushed boohoo into a terrible refinancing, while refusing to engage properly with Frasers on it. 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.”

The letter implores that boohoo will not sell any assets without shareholder approval.

It adds: “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. 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.

“This was to ensure that all options for securing best value for shareholders are appropriately reviewed and exhausted. 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.”

The strongly-worded letter shows Frasers’ frustration over the blockade by boohoo – going as far as naming individual board members.

It adds: “We ask each of the non-executive directors on the Board, namely Alistair McGeorge, John Goold, Tim Morris, Kirsty Britz and Iain McDonald to consider their personal duties. If it turns out that they have breached those duties, Frasers will not hesitate to push for legal action against them personally.”

Frasers has gone as far as setting up a special website to highlight its “solution” to the boohoo “crisis”.

The letter ends: “Frasers has established a dedicated website so that all boohoo shareholders can easily access all relevant information and materials with regards to Frasers’ solution to boohoo’s leadership crisis: www.boohoodeservesbetter.com. This will be available shortly.”

Frasers is boohoo’s largest shareholder, with around 27% of the issued share capital.