Boohoo refutes Frasers stone-walling claims over CEO proposal 

Boohoo has responded to Frasers’ call to install Mike Ashley as CEO, rebutting claims it has “stone-walled” Frasers over discussions about the appointment, whilst also calling Frasers’ categorisation of its debt refinancing “inaccurate and unfair”.Earlier this week, Frasers Group called on Boohoo to appoint its founder Mike Ashley as director and CEO of Boohoo after slamming the “continued incompetence” of the current Boohoo board amid an “abysmal” trading performance. 

In an open letter to Boohoo, Frasers urged the company to remove outgoing CEO John Lyttle as director and appoint Ashley as chief “without delay”, adding that his appointment would be in the “best interests of the company, its shareholders and its stakeholders”.

The letter also accused Boohoo of “stone-walling” its proposals, adding “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”.

Boohoo has rebutted this, however, and said its board has “neither delayed responding to Frasers’ requests for board representation nor ignored them”.

Instead, it claimed that Frasers’ wish for Ashley to be appointed as CEO and director was first communicated at an in-person meeting on 18 October 2024, when Frasers looked to establish a 48-hour deadline for the board to confirm it would proceed with the appointment. 

Boohoo said: “This was the first occasion on which Frasers had identified its preferred board candidate and followed Frasers having formally ruled out Mr Ashley for the role on 9 October 2024 and having previously and consistently indicated that its one nominee would perform a non-executive role.”

Boohoo also highlighted governance concerns over the proposal, and said: “As shareholders will be aware, Mr Ashley is a 73% shareholder in Frasers; in addition, Frasers owns a 23.6% stake in Asos, and both Frasers and Asos operate in similar markets to Boohoo. These are important facts that need to be taken into account and carefully considered by the board.”

It confirmed that it was still willing to discuss board representation with Frasers “in a constructive manner”, but has 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”. 

It added that it has “sought assurances from Frasers in this regard and they have not to date been provided”. 

Last week Boohoo announced that its CEO John Lyttle would step down after five years in the role. At the same time, Boohoo said it had secured a £222m debt refinancing agreement to support its “next phase of development”. 

However, in its open letter, Frasers called the terms of the debt refinancing “wholly unsatisfactory”. 

It said: “Frasers considers the refinancing to be a step backward for the company and an appalling outcome for shareholders. The new £222m facility is 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 in order to repay the term loan due in 10 months.”

It added: “Had Boohoo engaged constructively with Frasers on the refinancing, alternative solutions could have been fully explored which may have resulted in a more favourable outcome for all stakeholders.”

In response to this, Boohoo said this characterisation was “inaccurate and unfair”, adding that the refinancing “provides certainty for the company around its future requirements and is supported by its existing group of high street banks”.

It said: “The company’s approach to its recent debt refinancing was discussed on numerous occasions with Frasers and its advisers. As part of those discussions Frasers were advised that the board would be pleased to consider any alternative proposals they might wish to present, but none were forthcoming.”