boohoo Group PLC on Monday called on shareholders to block attempts by Frasers Group PLC to secure seats on its board as the war of words between the two sides escalated.

boohoo highlighted a recommendation from proxy advisor Institutional Shareholder Services Inc that investors oppose Frasers’ move.

The fast fashion retailer noted ISS has recommended that shareholders vote ‘against’ the resolutions at the general meeting on December 20, which seek board representation for Frasers, which owns Sports Direct and House of Fraser.

At the December meeting, boohoo shareholders will vote on a pair of resolutions tabled by Frasers. Frasers wants to add founder Mike Ashley and insolvency expert Michael Lennon to the boohoo board.

‘ISS states that Frasers has offered a superficial view of performance and no specific plans for change and the two Frasers candidates, Mike Ashley and Mike Lennon, have real conflicts of interest, concluding that board change at boohoo Group is not warranted,’ boohoo noted in a statement.

boohoo said this recommendation is in line with the unanimous recommendation of the company’s board.

The retailer believes boohoo has a credible plan to unlock and maximise value through its business review and in Dan Finley has the right chief executive to lead the business.

Boohoo Chair Tim Morris welcomed the backing of ISS.

‘We are clearly focused on doing what is right for all investors, following the launch of our business review to unlock and maximise shareholder value, the appointment of Dan Finley as our CEO and a successful fundraising,’ he added.

boohoo said Frasers appears ‘intent’ on disrupting the business review, ‘destabilising the company and acting only in its own commercial self-interest’.

The firm accused Mike Ashley of being ‘conflicted’ and not a suitable appointment to the board.

It noted Lennon is a practising insolvency expert with a history of working closely with Frasers.

‘Shareholders should ask themselves why Frasers would want him in situ at boohoo,’ the firm added.

‘The board is not deliberately seeking confrontation with Frasers, but will at all times act in the best interests of the company and all shareholders.’

CEO Finley said: ‘I believe that the group is fundamentally undervalued. There is no doubt that there is enormous opportunity for the group and I am determined to get back to being a disruptive and industry leading business.’

On Monday, Frasers issued a short statement pointing out the ISS opinion pre-dates a statement from Ashley on Sunday.

In a letter to boohoo shareholders on Sunday, Ashley said the online fashion retailer is currently a ‘catastrophic mess’ and took aim at a near 90% share price slide over the past five years.

‘What has the board been doing to create such a catastrophic mess of your company, driving the share price down by 90% in five years? That’s not bad luck; that’s gross mismanagement. Shareholders have

every right to feel angry and frustrated.’

He said brands are underperforming with ‘no clear strategy to halt the decline’.

‘I see panic-driven mismanagement resulting in reckless decisions that are obliterating shareholder value and jeopardising the company’s future’.

He claimed the recent game of musical chairs, including the appointment of Finley as CEO, is the ‘epitome of chaos, a desperate attempt to mask dysfunction at the top.’

Ashley founded Sports Direct owner Frasers, which owns around 28% of boohoo.

Frasers had tried to install Ashley as the boohoo chief executive.

boohoo last month, however, announced former Debenhams boss Finley as its new CEO, replacing John Lyttle.

On Monday, Frasers pointed out Ashley had expressed his determination to work on behalf of all boohoo shareholders and support Finley to ‘deliver on the opportunities to turn around the fortunes of the group and restore shareholder value’.

‘He [Ashley] has been very clear he would not want Debenhams sold or any fire sale of assets and has put on record his commitment to transparency and shareholder consultation, something badly missing under the current board. To achieve this, boohoo shareholders must vote for the resolutions on 20 December,’ Frasers said.

In his Sunday letter, Ashley said he believes boohoo ‘is in desperate need’ of his guidance and called on the AIM listing to not turn to a ‘fire sale’ of its assets.

He claimed boohoo is ‘not beyond saving’, adding that as a board member, he would bring the ‘fresh ideas, constructive support, and the much-needed accountability boohoo desperately needs.’

Shares in boohoo rose 1.5% to 35.78 pence in London on Monday morning. Frasers was 2.2% lower at 624.00p each.

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