Boohoo has responded following an attempted takeover of its board by Mike Ashley, the founder of Frasers Group.
This week, the retail magnate issued an open letter demanding that the fast fashion company appoint him as CEO, among other requests, describing the current situation as a “leadership crisis” caused by the retailer’s “incompetence.”
Boohoo expressed concerns regarding governance related to Ashley’s potential board involvement, citing his other business commitments.
”As shareholders will know, Mr. Ashley holds a 73% stake in Frasers; furthermore, Frasers possesses a 23.6% share in Asos, both of which compete in markets similar to that of Boohoo.
“These significant factors must be thoroughly considered by the board.”
The statement added: “While the board is open to discussing board representation with Frasers in a productive way, it has made it clear that any appointment must adhere to appropriate governance to safeguard the company’s commercial interests and those of other shareholders.
“Boohoo has requested assurances from Frasers on this matter, but these have not yet been provided.”
The company, which owns brands like PrettyLittleThing and Debenhams, stated that choosing a new CEO to succeed John Lyttle is a “critical board decision that necessitates careful evaluation and sound governance.”
Boohoo contested Frasers’ description of its £222 million debt refinancing deal as “inaccurate and unfair,” after the Sports Direct owner criticized it as a “regressive move.”
In its reply, Boohoo asserted: “The refinancing ensures clarity for the company regarding its future needs and enjoys the backing of its existing high street banks.”
Boohoo also noted it had engaged with Frasers over its refinancing options and invited the group to propose any alternative suggestions, but “none were provided.”
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