Mike Ashley has demanded Boohoo co-founder Mahmud Kamani step aside as tensions grow between two of retail’s most prominent figures.
The troubled fashion group yesterday revealed that Kamani has relinquished his role as executive chairman to become executive vice-chairman.
But the move, in which Boohoo insider Tim Morris was promoted to chairman, failed to soothe Ashley’s rage. His Frasers Group is Boohoo’s largest shareholder and has been pushing for change.
Boohoo said Mahmud Kamani (right) has relinquished his role as executive chairman to become executive vice-chairman but Mike Ashley (left) is demanding he step down
Morris said he would focus on ‘on delivering maximum value for, and protecting the interests of, all shareholders’. He pointed to £39.3million in new funding as a sign he can pull off a revival.
And Kamani, who founded the retailer in Manchester in 2006, will waive his salary for a year. He has also promised to not try to buy Boohoo or any of its assets.
But Frasers said the reshuffle made little difference. A spokesman said: ‘His title might have changed but his grip has not. Mr Kamani must go.’
It added: ‘Shareholders have lost money and there is justified disappointment with, and distrust of, the current leadership, in particular, Mr Kamani.’
Frasers is pushing for Ashley and restructuring expert Mike Lennon – a close ally of the tycoon – to be given seats on the Boohoo board.
Shareholders will vote on the proposal on December 20. Frasers, controlled by Sports Direct tycoon Ashley, owns 28 per cent of Boohoo, while Kamani owns 12.6 per cent.
Ashley, a ruthless takeover specialist, has grown his retail empire from one shop in Maidenhead, Berkshire, to an estate that includes Game, Jack Wills and Agent Provocateur.
He tried to install himself as chief executive, but Boohoo appointed insider, Dan Finley, this month. Boohoo has urged investors to reject Ashley’s demands, saying he is promoting ‘commercial self-interest’.
‘The board has a credible plan to unlock and maximise value for all shareholders,’ Boohoo said last week.
A ‘make or break’ review has set the scene for a break-up of the company. It has thrown into doubt the future of brands including Oasis and Coast which could be spun off or sold.
Russ Mould, investment director at AJ Bell, said: ‘Kamani is unlikely to bow to Frasers’ demands and leave without a fight. He helped to build the business and make it one of the country’s biggest forces in fast fashion.
‘While Boohoo has lost its way, it’s unfathomable that Kamani will let someone else step in and reassemble the business in a different way. It would be an admission of failure.’
Maximising its appeal to trendy young shoppers, Boohoo lifted its shares to a peak in 2020 during lockdowns, when it was valued at over £5billion.
But trading has suffered in the face of fierce competition from rivals such as Shein.
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