News Pricer.lt

Mike Ashley demands Boohoo make him CEO

Mike Ashley demands Boohoo make him CEO

Mike Ashley has demanded that fashion brand Boohoo, in which he owns a 27% stake, appoint him as its new chief executive in an open letter to its board.

Frasers Group, which Ashley controls, has requisitioned a general meeting of Boohoo to propose hiring the retail tycoon as a director and CEO of the company, as well as Kroll Advisory managing director Mike Lennon as a director, to take effect without delay.

It said this was a solution to what it termed a “leadership crisis” at Boohoo. Last week, the retailer revealed that CEO John Lyttle will exit the embattled retailer after five years.

Frasers revealed it had proposed nominating an “experienced individual” to the board on “a number of separate occasions” and put forward its proposal to make Ashley director and CEO in light of Lyttle’s resignation when its advisers met with a Boohoo non-executive director last Friday.

It said: “At the time of this letter, Frasers has not received a decision from the board regarding Mr. Ashley’s appointment. Instead, we have received holding responses that result in further delays in a situation where time is of the essence. Frasers therefore has no choice but to assume that the board has rejected Frasers’ proposal for board representation.

“In the face of persistent failure by the board to meaningfully engage on this subject…Frasers has been left with no option but to take action itself in order to provide a solution to Boohoo’s leadership crisis.”

The retail group said that Boohoo needed to “urgently needs to address the management of its business” and highlighted the fashion retailer’s “abysmal performance and share price collapse”.

It pointed out that its sales had fallen 36.5% over the last three years, when comparing its half-year 31 August 2024 to the same period in 2021. Meanwhile, its share price has fallen over 29% year-to-date and around 17% in the last three months.

Related Story

Boohoo secured a £222m debt refinancing agreement last week to support its “next phase of development”. However, Frasers said it believed the terms of the refinancing were “wholly unsatisfactory” and is a “step backward for the company and an appalling outcome for shareholders”.

It claimed the new debt 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 (whether it be disposals, deeper operational cuts, closures etc.) in order to repay the term loan due in 10 months”.

“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,” it added.

The online fashion group revealed last week that it was considering a break up of the business as it explored its options to “unlock and maxmise shareholder value”.  Frasers said: “Given the
concerns regarding the refinancing and the near-term repayment deadline, Frasers would like to make absolutely clear that no disposals should be made without first consulting Frasers and all other major shareholders.”

It said it had made repeated attempts to engage with the Boohoo board on “a wide number of urgent and pressing issues facing Boohoo, including the total lack of willingness to consider alternatives which Frasers proposed to the refinancing”.

It said: “There has been a complete failure to meaningfully engage with us, your largest shareholder.”

Boohoo said: “The Boohoo board is in the process of reviewing the content and validity of the requisitions with its advisers. A further announcement will be made in due course.”

Click here to sign up to Retail Gazette‘s free daily email newsletter

News source

Dalintis:
0 0 balsai
Straipsnio vertinimas
guest
0 Komentarai
Seniausi
Naujausi Daugiausiai įvertinti
Inline Feedbacks
Rodyti visus komentarus

Taip pat skaitykite: