Ashley weighs up next move after boohoo shareholders reject board bid

Manchester-based online fashion retailer, boohoo, has seen off Mike Ashley’s Frasers Group’s bid to oust its CEO and install Ashley as chairman.
Derbyshire-based Frasers, which includes the Sports Direct brand and is the biggest boohoo stakeholder with a 28.1% shareholding, wanted to unseat boohoo co-founder and executive chairman, Mahmud Kamani, and install Mike Ashley and Mike Lennon on the board.
But at a specially convened General Meeting in Manchester on Friday (December 20), both resolutions were soundly rejected by boohoo shareholders.
At a meeting in January it is expected that Ashley will seek to remove Kamani from the board.
In a statement this morning (23 December 2024) the retail powerhouse said: “Frasers takes note of boohoo’s invitation to propose a board candidate other than Mr. Ashley or Mr. Lennon. We will put forward a highly qualified candidate in due course and fully expect boohoo’s board to uphold their commitment without hesitation or delay.”
The call to appoint Ashley failed after 63.77% of votes cast went against the resolution, while Lennon’s failed with 63.76% voting against.
In a separate announcement this morning boohoo announced it had sold its London office, located on Great Pulteney Street, Soho.
The property has been sold for £49.5m in cash to Global Holdings UK Limited, an independent property fund. The company said the action had been taken “to dispose of this non-core and non-strategic asset will further strengthen the company’s balance sheet.”
Part of the proceeds will be used to pay down, in full, the remainder of the term loan, which was due for repayment in August 2025. This will leave the business with a £125m revolving credit facility which is sufficient for its needs going forward.
But the general meeting on Friday has been a huge distraction for the board, which says it has a plan to turn the business around, which it insists is undervalued.
Tim Morris, Independent Non-Executive Chair of boohoo Group, said: “I would like to thank our shareholders for their support of the board.
“We remain focused on delivery of our Business Review with the objection of unlocking and maximising value for all shareholders.”
Dan Finley, boohoo Group Chief Executive, said: “Our group is a dynamic business, with great brands and extremely talented people, underpinned by best-in-class infrastructure.
“Since my appointment, I have hit the ground running, taking immediate and decisive actions to maximise and unlock value for all shareholders.”
He added: “I am super energised to realise the significant opportunities I see for this business.
“I continue to believe this group is materially undervalued. Our most important work is ahead of us, and we will drive value for all shareholders.”
In the weeks running up to the meeting independent proxy advisers, Glass Lewis and Institutional Shareholder Services Inc both recommended that boohoo shareholders vote against the resolutions to install Ashley and Lennnon on the board.
Frasers Group went public with its criticism of boohoo in October in an open letter to its shareholders which warned of a “crisis” at boohoo, pointing out that the firm’s revenue for the six months to the end of August was down 36.5% and saying that when it publishes its half year results in November, gross profit will be down for the sixth consecutive reporting period.
It went on to criticise a number of other issues, such as boohoo’s recent £222m debt refinancing deal. Frasers calls this “severely short-dated, seemingly more expensive than the previous financing arrangement and almost unquestionably leaves the company in a position of needing to undertake drastic corporate actions (whether it be disposals, deeper operational cuts, closures etc.) in order to repay the term loan due in 10 months.”