Frasers warns Boohoo to not promote belongings with out shareholder approval

Frasers has demanded Boohoo publicly declare it will not sell assets without shareholder approval, as the pair’s high-profile spat gathers pace.  

The retail giant urged the struggling fast fashion brand to ‘stop, once and for all’ its ‘utter disregard for shareholder views’, claiming Boohoo had refused to privately agree to consult shareholders before selling off parts of the business.

Frasers, which is a 27 per cent shareholder in Boohoo, has been at war with the group over a sharp share price decline, weak profits and fierce disagreements over the company’s future.

Loggerheads: Boohoo CEO Dan Finley (left) and Frasers founder Mike Ashley 

Last week Boohoo named Debenhams boss Dan Finley as its new chief executive, crushing Frasers’ demands for the appointment of its founder Mike Ashley.

Frasers had called for Ashley to take the helm as it lashed out at ‘abysmal’ performance and ‘mismanagement’ it believes has led to a more than 90 per cent collapse of Boohoo’s share price since its Covid-era peak.

But Boohoo defended the decision – unanimously agreed by the board – saying Finley was ‘the obvious internal candidate’ for the role’.

Frasers wrote on Wednesday that Boohoo had ‘rushed out a CEO appointment to try to block the say of shareholders’ on the company’s leadership

‘This has to stop,’ it added. ‘What will they try next? Desperate people do desperate things.’

Frasers said Boohoo had not ‘meaningfully engaged’ with an October request for written confirmation ‘it would not commence any process or enter into any agreement… for a disposal of any of Boohoo’s assets without first engaging with Frasers on alternative options’.

It warned: ‘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.’

Frasers said Boohoo must ‘urgently and publicly confirm’ it ‘will not make a disposal of any asset or business line… without prior shareholder approval’.

It also demanded Boohoo publish, prior to any sale, ‘the confirmation of an independent global adviser [or] investment bank that the terms of the disposal are fair and reasonable, the disposal has been conducted at arm’s length and the disposal is in the best interests of Boohoo’s shareholders’.

Frasers company secretary Robert Palmer wrote: ‘The restriction on disposals without shareholder approval and the requirement for confirmation from an independent global adviser / investment bank are required in order to protect the interests of boohoo, its shareholders and its stakeholders.’

Boohoo declined to comment.