- Frasers wants Mike Ashley as Boohoo CEO
- Boohoo board unresponsive
- Company owns 27% Boohoo stake
Embattled online fast-fashion retailer Boohoo (BOO:AIM) jumped 3% on news its largest shareholder Frasers (FRAS) has requisitioned a general shareholder meeting to appoint Mike Ashley as CEO.
Ashley has published an open letter after being stone-walled by Boohoo’s board in his attempts to meaningfully engage in discussions to address the company’s ‘leadership crisis’, ‘abysmal trading performance’ and ‘mismanagement’.
The letter concludes: ‘It is critical for Boohoo’s future success that shareholders urgently be given the opportunity to appoint experienced individuals capable of delivering the necessary changes to deliver long term value to all shareholders.
‘We are confident that we are not alone in these views and that shareholders will vote for the governance change that Boohoo so badly needs.’
Boohoo’s board said it was in the process of reviewing the content and validity of the requisition notices.
WHAT ARE THE EXPERTS SAYING?
Clive Black at Shore Capital said: ‘Mike Ashley wants to remove the incumbent CEO and bring a friend along for good measure. Quite how this has gone down in Boohoo towers remains to be seen, but this could be a bit of a blockbuster event, making the Mulberry (MUL:AIM) duel with Chalice look very tame.’
Black is reserving judgment on whether the latest twist is good for Boohoo shareholders but has a sense it may not be all bad. ‘Get out the popcorn’, concludes Black.
AJ Bell investment director Russ Mould commented: ‘Ashley has left the day-to-day running of Frasers to his son-in-law Michael Murray since 2022 but today’s news suggest he is itching to get back to the coalface and, if his bid to lead Boohoo is successful, it’s unlikely to be a quiet tenure.
‘Boohoo is vulnerable amid the news CEO John Lyttle is set to step down and the ongoing strategic review which could see the business broken up. Given the mess Boohoo has got itself into it could take all of Ashley’s nous and experience to turn things around.’
Disclaimer: Financial services company AJ Bell referenced in the article owns Shares magazine. The author (Martin Gamble) and the editor (James Crux) own shares in AJ Bell.
