- CEO appointed from within
- Dan Finley transformed Debenhams
- Mike Ashley may yet flex his muscles
Challenged online fashion retailer Boohoo (BOO:AIM) has shunned major shareholder Frasers’ (FRAS) demand to install Mike Ashley as CEO and appointed internal candidate Dan Finley as its new boss instead.
Finley has been running Boohoo’s fast-growing online department store Debenhams since 2022 and replaces John Lyttle as group CEO with immediate effect.
Shore Capital said the hire has ‘box office implications’, having been made amidst Frasers’ bid to make retail tycoon Ashley the struggling online retailer’s CEO.
Shares in PrettyLittleThing-to-Karen Millen owner Boohoo bounced 3% to 30.5p on the surprise news.
WHO IS DAN FINLEY?
New broom Finley will need some bright ideas to put Boohoo back on the right track. But the fact a strategic review is already underway, with suggestions that certain brands will be sold, means the new boss can hit the ground running.
Before joining Boohoo as CEO of Debenhams in January 2022, following the online retailer’s £55 million acquisition of the brand out of administration, Finley spent a decade driving the digital growth of JD Sports Fashion (JD.).
Boohoo stressed that under his leadership, Debenhams has been transformed into ‘Britain’s leading online department store with a GMV (gross merchandise value) annual run rate of circa £800 million, through a capital-light, cash generative and highly profitable marketplace model’.
Deputy chairman Alistair McGeorge said the board was ‘unanimous’ in its decision to appoint Finley as CEO, being ‘one of the outstanding leaders in a new generation of digital retailers’.
WILL MAGIC MIKE FLEX HIS MUSCLES?
Shore Capital commented that Mike Ashley has sought to be Boohoo CEO and it is far from certain he will not succeed, even with Finley’s appointment.
‘The Boohoo board may be unanimous in its approval of Mr Finley but it is others who will ultimately make the choice,’ said the broker.
‘One senses that exchanges between the Boohoo and elements of the Frasers camps may have been most colourful to date, but we await to see if there will be more knock-out blows to come, with interest. We did say that this may be a blockbuster and both parties are not disappointed. More popcorn please!’
Russ Mould, investment director at AJ Bell, said that while Finley is relatively young for a CEO at 41, his 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.
‘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,’ explained Mould, though the challenge Finley faces is immense.
‘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,’ said Mould.
‘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.’
DISCLAIMER: Financial services company AJ Bell referenced in this article owns Shares magazine. The author of this article (James Crux) and the editor (Martin Gamble) own shares in AJ Bell.
