Mike Ashley demands to take charge at Boohoo amid leadership crisis

By Investor Empires On Oct 25, 2024

Retail tycoon Mike Ashley’s Frasers Group has called for him to be appointed as the new chief executive of Boohoo, where Frasers has a 27% stake, following concerns about a “leadership crisis” at the fast fashion retailer.

In an open letter, Fraser urged Boohoo to replace current CEO John Little, who recently announced his intention to step down, with Ashley to address the company’s deteriorating performance.

Frasers Group cited Boohoo’s poor trading results and share price collapse as the main reasons for the proposed leadership change. Boohoo’s revenues for the six months to August 2024 fell by 36.5%, with overall profits expected to fall for the sixth consecutive reporting period. The letter criticized Boohoo’s board for overseeing the long-term collapse in the share price, which has fallen 29% year to date and 17% in the past three months.

Frasers Group, a FTSE 100 company, has expressed frustration at what it describes as Boohoo’s failure to meaningfully engage in its demands to refresh the board, accusing the retailer of using “delay and ignore” tactics in its attempts to meet executive chairman Mahmoud Kamani.

Strategic review and confrontation looming

Last week, Boohoo announced a strategic review to explore options to unlock shareholder value, including a potential split of the company and sale of brands such as PrettyLittleThing, Dorothy Perkins and Warehouse. The move sets the stage for a potential clash between old rivals Ashley and Kamani, especially as the Fraser Group has steadily increased its stake in Boohoo since June 2023.

Frasers Group believes that appointing Ashley to the position of CEO is the “best solution” to resolve leadership issues and stop the destruction of company value. However, Boohoo is reviewing the application with its advisors and stated that further announcements will be made in due course.

With tensions rising between Ashley and Kamani, this boardroom battle could shape the future direction of Boohoo as it faces significant financial challenges.

Jimmy Young

Jamie is an experienced business journalist and senior reporter at Business Matters, with over a decade of experience reporting on UK SME business. Jamie holds a degree in Business Administration and regularly participates in industry conferences and workshops to stay at the forefront of emerging trends. When Jamie is not reporting on the latest business developments, he is passionate about mentoring up-and-coming journalists and entrepreneurs, sharing their wealth of knowledge to inspire the next generation of business leaders.