Boohoo accuses Frasers of ‘commercial self-interest’ as row continues

Boohoo has raised “concerns” over Frasers’ behaviour in a new open letter to the Mike Ashley-owned company, as a row over Frasers’ own involvement in Boohoo continues, with the retailer now accusing Frasers of “commercial self-interest”. Its latest response comes as Frasers sought stronger involvement in Boohoo’s strategic review, with Boohoo calling the move "inappropriate" due to the fact Frasers is a trade competitor and not an independent shareholder in the online retailer. Boohoo highlighted the conflict of interest in place, noting that Frasers' brands compete with Boohoo’s own brands, including Boohoo, PrettyLittleThing and Karen Millen, while Frasers is also a large shareholder in Asos, which directly competes with Boohoo's brands. It added that Frasers had a “well-publicised history” of making significant investments in other UK retailers which also compete with Boohoo. In light of this, Boohoo said it “considers it wholly inappropriate for Frasers to seek to leverage its significant shareholding in Boohoo and other UK retailers to promote its own commercial self-interest, such as Frasers PLUS, at the expense of the other shareholders and will take all steps necessary to protect its commercial position and shareholders best interests”. Boohoo previously said that while it “remains willing to discuss board representation with Frasers in a constructive manner”, it will only offer a seat for an “appropriate” non-executive director, with appropriate governance controls put in place to protect its commercial position and shareholder interests. It added that it has “repeatedly sought assurances” from Frasers over this but “none have been provided”. Frasers, which owns a 27% stake in Boohoo, recently called Boohoo’s decision to appoint a CEO from within “desperate”, after the fast-fashion retailer rejected Frasers’ demands to appoint Ashley as leader of the group. Following the internal promotion of Debenhams CEO Dan Finley to lead Boohoo, Ashley told the Sunday Times: “Independent shareholders be warned, desperate people do desperate things.” Last week, Boohoo announced the appointment of Finley as its new CEO. Finley, who has been with Debenhams for two years, will take up the role with immediate effect. However, Frasers previously published a letter attacking Boohoo’s management and calling for Ashley to be appointed as a replacement for John Lyttle, Boohoo’s outgoing chief executive. Last month, Boohoo responded to Frasers’ call to install 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”. Frasers Group had called on Boohoo to appoint 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 rebutted this, however, and said its board has “neither delayed responding to Frasers' requests for board representation nor ignored them”. In its latest open letter to Frasers, Boohoo concluded: “It stresses to Frasers that their continual legal letters and public posturing are not conducive to maximising value for all shareholders, and encourages them to enter into constructive discussions with the board.”