RETAILER Frasers Group has called on the online fashion group Boohoo, in which it holds a 27% stake, to appoint the high-profile Mike Ashley as chief executive, saying this would solve the “leadership crisis” at the business.
Frasers, which owns House of Fraser department stores, Sports Direct, Evans Cycles and the Flannels luxury fashion chain, said it has requisitioned a general meeting and written an open letter to Manchester-based Boohoo’s board.
The company stated: “Frasers is Boohoo’s largest shareholder, with c.27% of the issued share capital. This is a significant investment for Frasers in its capacity as a constructive, long-term, strategic investor, committed to maximising value for the benefit of all Boohoo shareholders and other stakeholders.
Frasers ditches £111m takeover plans for luxury firm Mulberry
“Frasers is requisitioning a general meeting of Boohoo to appoint Mike Ashley as a director and CEO of Boohoo and Mike Lennon as a director of Boohoo, to take effect without delay. Frasers firmly believes that these appointments are in the best interests of Boohoo, its shareholders, and its stakeholders.”
The statement said the board appointments proposed by Frasers “are now the only way to set a new course for Boohoo’s future”, adding: “Frasers urges Boohoo shareholders to vote in favour of its proposals.”
Boohoo said last week that its chief executive John Lyttle was to step down after five years in the role although no date for his departure was given. Frasers said Mr Ashley could take on the CEO role at Boohoo “without delay”, with restructuring expert Mr Lennon also joining the board.
The online retailer was founded by Mahmud Kamani and Carol Kane in 2006 and listed on the London Stock Exchange in 2014. Its brands include Karen Millen, Debenhams, Oasis and PrettyLittleThing.
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In its own statement, it 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.”
Meanwhile, Frasers said yesterday that it was walking away from a takeover attempt of handbag maker Mulberry after being rejected twice – but renewed its efforts to secure a boardroom seat so it can wield greater influence over the British luxury brand.
It dropped its plans for a £111 million bid and said it had decided not to make a firm offer ahead of Monday’s bid deadline in light of Mulberry’s rejection of its latest approach and “in the absence of proper engagement from the Mulberry board”.
Frasers, however, urged Mulberry to provide a “credible” plan soon and raised worries over the governance of the fashion firm, which is majority-owned by Challice – a group controlled by Singaporean entrepreneur Christina Ong and her husband Ong Beng Seng.
Mike Ashley's Frasers pounces on weak Boohoo share price
The Sports Direct owner, which already owns a 37% stake in Mulberry, is pushing for an appointment to the company’s board and said it hopes for “fuller engagement with both Mulberry and Challice on a range of topics”.
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