Frasers calls for Boohoo investors to veto asset disposals

Frasers Group has called for a shareholder veto over asset disposals at Boohoo as it steps up its battle with the fast-fashion group.
The FTSE 100 retail conglomerate has demanded a “restriction on disposals without shareholder approval” to “protect the interests of Boohoo, its shareholders and its stakeholders” in an open letter to the board.
Mike Ashley, the billionaire founder of Frasers Group who is also a Boohoo shareholder with a 27 per cent stake, had been lobbying Boohoo to install him as chief executive as it launched a strategic review of the group’s operations, which comprise a number of fashion labels including PrettyLittleThing, Karen Millen, Oasis and Warehouse.
Yet, Boohoo decided to appoint Dan Finley, who was leading the Debenhams brand, as its boss instead, replacing John Lyttle, who resigned last month.
Frasers has been criticising the board of Boohoo for the decline in the company’s share price, and in the letter published on Wednesday, chastised the board over “its utter disregard for shareholder views”. Frasers said shareholders must be allowed to approve any asset sales and have confirmation from an independent financial adviser or investment bank that the disposal had been conducted “at arm’s length” and on terms that were “fair and reasonable”.
• Boohoo appoints Debenhams boss Dan Finley as chief executive
In the letter, Frasers said: “Given the market headwinds and commercial difficulties that Boohoo is currently facing, any asset disposals by the company, including any of its five core brands or the Soho office, would be executed from a position of weakness and unquestionably be at a discounted valuation, and would therefore be wholly unacceptable without prior shareholder approval.
“The board has refused to meaningfully engage on Frasers’ request. The board has had an opportunity to confirm that it is not intending to make any such disposals, but has not done so.”
Boohoo has told shareholders to reject Ashley’s bid for a seat on the board and has branded his criticisms as “inaccurate and unfair”. The retailer raised governance concerns about Ashley joining as Frasers holds a 23.6 per cent stake in its competitor Asos.
The company said: “These are important facts that need to be taken into account and carefully considered by the board.
“Whilst the board remains willing to discuss board representation with Frasers in a constructive manner, it has been clear with Frasers that before any appointment can be made, appropriate governance will be required to protect the company’s commercial position and the interests of other shareholders.”
Ashley, 60, has himself faced shareholder criticism over corporate governance concerns at his company in the past for granting a payment to his brother John Ashley of £11 million to deliver orders outside the UK.
The arrangement with his brother’s company Barlin Delivery was not initially disclosed in the group’s annual report in 2016. The company, which was known as Sports Direct at the time, asked RPC, its law firm, to review the arrangement but one shareholder said the set up was “really hard to support” because “it doesn’t really make any sense”.
The retail entrepreneur was also criticisedwhen he appointed his daughter’s boyfriend to run his company’s property team. Michael Murray, who is now married to Ashley’s eldest daughter Anna, became chief executive of Frasers Group in 2022.