Boohoo has urged investors to reject Mike Ashley’s bid for a board seat at a shareholder meeting next month, as it posted widening losses.
The online fashion giant also launched a fundraise yesterday for £39.3m, which it said was “significantly oversubscribed” overnight.
The retailer’s new fundraising drive will provide “strategic flexibility” as it works to reduce debt and reposition itself.
In its half-year results for the six months ending August, revenue plunged 15% to £620m, while pre-tax losses widened from £36.6m to £147.3m.
The retailer blamed competitive pressures from ultra-fast fashion rivals like Shein for the slump, and is banking on a stategic review, led by new CEO Dan Finley, to revitalise its portfolio and boost value across its brands.
Finley, who stepped into the role at the start of this month, stressed that Boohoo has “a credible plan to unlock and maximise value for the benefit of all shareholders” and expressed optimism about turning around the company’s fortunes through targeted growth strategies across its core brands.
He highlighted the positive performance of its Debenhams and Karen Millen brands, noting that Debenhams achieved over 170% growth in gross merchandise value year-on-year as it cemented its position as a leading online marketplace with over 10,000 brands.
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Ashley’s Frasers Group, which holds a 27% stake in Boohoo, is campaigning for board influence at Boohoo, even setting up a website called Boohoo Deserves Better to promote his case.
Frasers Group has argued that its request for a board seat request is to protect shareholder value, expressing concerns that Boohoo co-founder Mahmud Kamani might consider reacquiring the company’s assets at a discount.
Boohoo’s board responded, issuing a circular questioning Frasers’ intentions and accusing Ashley of acting in “commercial self-interest” rather than prioritising broader shareholder benefits.
The board has raised concerns about Ashley’s potential conflicts of interest, given Frasers Group’s stakes in competing fashion brands, and highlighted previous instances where Frasers, through similar moves, took control of troubled retailers, sometimes at the expense of other shareholders.
Boohoo’s leadership is pushing back, emphasising its own “clear plan” for growth under Finley’s guidance and warning of the risks posed by Frasers’ influence on the board.
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