- Over the past five years, shares in Boohoo have fallen by nearly 90%
- Frasers has accused Boohoo’s current management of being ineffective
Another media advisory firm has spoken out against Frasers Group’s bid to elect Mike Ashley and his partner Mike Lennon to the board of Boohoo.
Glass Lewis has followed Authorized Dealer Services calling on Boohoo shareholders to vote against the pair’s appointment at the December 20 general meeting.
Frasers believes appointing Ashley and Lennon will provide the leadership it needs to revive Boohoo, which has seen its shares sink nearly 90 per cent in the past five years. amid declining sales.
He has accused the current board of directors of incompetence and the presidency of ‘massive value destruction’, with Frasers previously calling for Ashley to be appointed as head of Boohoo.
But in a major move, Boohoo has named Debenhams boss Dan Finley to replace John Lyttle, who took over as chief executive in October after five tumultuous years at the helm.
Unsupported: Investment advisory firm Glass Lewis has slammed Frasers Group’s plans to appoint Mike Ashley (pictured) as chief executive of Boohoo
Glass Lewis said Boohoo shareholders ‘are unwilling to support the appointment of the opposition candidates (Mike Ashley and Mike Lennon) at this time.’
It warned that putting a director on the board with ‘significant past links’ to Frasers without the necessary measures in place to mitigate potential conflicts of interest would ‘increase concern among shareholders’ money.’
This is in line with a statement raised on Monday by the ISS, which said Ashley and Lennon had a ‘real conflict’.
Glass Lewis added that Frasers’ failure to provide the required management commitments ‘may suggest that their views are not fully aligned with the interests of the company’s wider shareholder base’.
Finley said: ‘I am encouraged by Glass Lewis’ support, which demonstrates the importance of protecting Boohoo’s independence and ensuring that decisions are made in the best interests of all shareholders.
‘With the support of our independent Board, led by Tim, my priority is to drive Boohoo forward as a disruptive, industry-leading business.’
Boohoo, the owner of Burton, Dorothy Perkins and PrettyLittleThing saw a significant increase in growth at the start of the Covid-19 pandemic as a strong ban on physical stores forced Britons to buy clothes online.
Sales will slow significantly after restrictions are eased as shoppers return to buying clothes in stores.
Sales are expected to decline as inflation continues to rise and competition from rivals such as Chinese giants Shein and Temu increases.
For the financial year ending in February, Boohoo’s revenue fell by more than £300million to £1.5billion, while pre-tax losses rose by three quarters to the £159.9 million.
Distributed by the Boohoo team was 0.35 percent higher than 34.6 pi on Thursday morning, while Frasers Group shares it was down 0.2 per cent at 623p.
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