Boohoo Group has slammed the door on Mike Ashley’s bid to be installed as chief executive of the online fashion retailer.
Shares in the company climbed more than 3% after it appointed retail veteran Dan Finley, currently boss of Boohoo’s Debenhams brand, as group chief executive with immediate effect.
It came just days after Frasers Group, Boohoo’s biggest shareholder with a 27% stake, demanded that its founder, Mr Ashley, be appointed chief executive of Boohoo to address with it termed a “leadership crisis” at the firm. That followed departure of former Boohoo boss John Lyttle, whose departure two weeks ago was announced as the firm declared it was launching a review of each of its divisions – sparking speculation that it could be broken up. The Boohoo business includes Debenhams, Karen Millen and Young Fashion Brands, the latter of which comprises the PrettyLittleThing, boohoo, and boohooMan brands.
Announcing the appointment of Mr Finley, Boohoo talked up the new chief executive’s credentials for the role, stating that his elevation “recognises the phenomenal success that Debenhams has enjoyed and reflects the evolution in the strategic direction of the group”.
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Boohoo noted that before joining Debenhams, Mr Finley spent a decade as group multi-channel director at JD Sports, “where he delivered unprecedented digital growth”.
He joined Boohoo as chief executive of Debenhams in January 2022, after the company acquired the brand out of administration. Boohoo said that under his leadership Debenhams has been “transformed into Britain’s leading online department store”.
Russ Mould, investment director at stockbroker AJ Bell, said the appointment signalled that Mr Ashley had been “defeated in his quest to run Boohoo”.
“While relatively young for a CEO at 41, Finley’s background looks solid, having spent a decade as a JD Sports director and then nearly three years helping to transform Debenhams as a digital entity,” he said. “Clearly that’s not a patch on Ashley’s extensive retail experience, but it’s the right type of CV to grab the top job for a company of Boohoo’s size.
“Finley will need some bright ideas to put Boohoo back on the right track. The fact a strategic review is already underway with suggestions that certain brands will be sold means that the new boss can hit the ground running. Normally it would take a period of six months for a new CEO to start the job and think about the future structure.
“That doesn’t mean all the big decisions have been made before Finley gets his new office. If anything, he is promoted just at the right time when a lot of preparatory work has been done on each division’s prospects, but he gets to make the final call on where Boohoo goes next.”
However, Mr Mould raised Frasers and Mr Ashley will be monitoring the progress of the new chief executive closely.
“The challenge is immense," he said. "The previous boss, John Lyttle, spent years trying to fix Boohoo without any success. Finley will need to be creative, have a sharp focus, and think differently to his predecessor.
“There is also the risk that Mike Ashley flexes his muscles as a major shareholder via Frasers to cause disruption if he doesn’t like the new appointment. Ashley isn’t one to mince his words so it will be interesting to get his views on Finley’s suitability for the role.”
Alistair McGeorge, group deputy chairman at Boohoo Group, said: "The board of boohoo was unanimous in its decision to appoint Dan Finley as CEO. Dan is one of the outstanding leaders in a new generation of digital retailers.
“Dan and his team have successfully transformed Debenhams from a failed department store, creating a new business model that is a capital-light, stock-light, high-growth marketplace. Before Debenhams, Dan had a track record of phenomenal success in online retail during his 10 years at JD Sports. The board looks forward to working with him, as we continue the review of options to unlock and maximise shareholder value."
Mr Finley said: "I am excited at the opportunities I see ahead as I become CEO of Boohoo Group. We have brilliant brands and people, underpinned by best-in-class infrastructure. Under my leadership we have had great success with Debenhams, and I look forward to exploring opportunities to extend this business model across the group. I will dedicate myself totally to working with my colleagues to unlock significant value for all shareholders."
Shares in Boohoo Group closed up 3.31% at 30.6p.
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