- Frasers wanted to appointed Ashley and Mike Lennon to the Boohoo board
- Boohoo shares have plunged by approximately 90% over the last five years
Frasers Group’s attempts to put Mike Ashley on the board of struggling online retailer Boohoo have resoundingly failed.
Boohoo shareholders rejected two resolutions at a general meeting in Manchester on Friday that would have appointed Ashley and his associate, insolvency expert Mike Lennon, to board positions.
Only around 36 per cent of votes cast in both resolutions were in support of Ashley and Lennon’s respective nominations, with the remaining 63.8 per cent against.
Proxy advisors ISS and Glass Lewis opposed their appointment, as did the Boohoo board, partly over governance and conflict of interest concerns.
Boohoo, which owns Dorothy Perkins and PrettyLittleThing, offered last week to give Frasers one board seat – as long as it was not Ashley or Lennon.
But Frasers believed the two men’s leadership was needed to turn around Boohoo, whose shares have plunged by approximtely 90 per cent over the last five years.
Unsuccessful: Mike Ashley’s attempts to become the chief executive of Boohoo have failed
In an October letter, the FTSE 250 company accused Boohoo’s bosses of overseeing ‘large-scale value destruction and long-term and continued incompetence.’
It also claimed the Manchester-based firm had engaged in ‘delay and ignore’ tactics by failing to ‘meaningfully engage’ on its board representation proposals.
The letter was published in October after John Lyttle announced he was standing down as Boohoo’s CEO following a tumultuous five years in charge.
But instead of taking its suggestion to appoint Ashley, Boohoo instead decided to name Debhams boss Dan Finley as Lyttle’s replacement.
Commenting on Friday’s shareholder meeting, Finley said: ‘Our group is a dynamic business, with great brands and extremely talented people, underpinned by best-in-class infrastructure.
‘Since my appointment, I have hit the ground running, taking immediate and decisive actions to maximise and unlock value for all shareholders.
‘I am super energised to realise the significant opportunities I see for this business. I continue to believe this group is materially undervalued.
‘Our most important work is ahead of us, and we will drive value for all shareholders.’
Like many e-commerce firms, Boohoo enjoyed breakneck growth during the early part of the Covid-19 pandemic when governments imposed severe restrictions on trading at ‘non-essential’ stores.
Its sales then slowed significantly after the curbs were relaxed before falling due to cost-of-living pressures and growing competition from Chinese fast fashion retailers Shein and Temu.
In the last financial year, the group’s turnover slumped by more than £300million to £1.5billion, while its pre-tax losses soared by 76 per cent to £159.9million.
Boohoo Group shares were 1.6 per cent higher at 33.3p on late Friday afternoon, while Frasers Group shares were 4 per cent up at 634p.
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