Boohoo has once again urged shareholders to vote against Frasers Group’s proposed board appointments ahead of its general meeting on 20 December.
The recommendation, announced this morning (12 December) follows advice from proxy advisers Glass Lewis and ISS, both of which have recommended shareholders vote against the resolutions.
Glass Lewis has raised concerns over conflicts of interest and stated that appointing Mike Ashley to Boohoo’s board could undermine shareholder interests without proper governance safeguards in place. The adviser added that Frasers’ refusal to address these concerns further questions their motives.
Glass Lewis concluded that “shareholders would not be well served supporting the appointment” of Mike Ashley and Mike Lennon to Boohoo’s board.
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Boohoo Group chairman Tim Morris said: “The Board of boohoo welcomes the recommendation from Glass Lewis for Shareholders to vote against the Resolutions proposed by Frasers Group at the upcoming General Meeting.
“Glass Lewis’s analysis underscores our concerns regarding the significant risks posed by appointing individuals with strong historical ties to Frasers without adequate governance commitments in place.”
CEO Dan Finley added: “I am encouraged by Glass Lewis’s support, which highlights the critical importance of protecting boohoo’s independence and ensuring decisions are made in the best interests of all Shareholders. I remain focused on executing our strategy to unlock value for all Shareholders as part of the Business Review.”
Boohoo has struggled with performance in recent years following the rise of fast-fashion giants like Shein and Temu, which offer extremely cheap clothes to customers worldwide.
In its latest half-year results, revenue fell 15% while adjusted operating profit fell 10.5% and net debt increased by over £100m.
However, Frasers’ bid to take control could be undermined by its own sliding sales. Last week it cut its profit outlook for the year to £550m-£600m after a 33% drop in pre-tax profit to £207.2m and an 8% fall in sales in the first half.
Earlier this week, Finley reaffirmed his confidence in the online fashion group, specifically Debenhams amid the group’s showdown with the Sports Direct owner.
In a message uploaded onto the Boohooforall website, Finley said: “I believe Debenhams alone, with the progress we’ve made and the opportunities that lie ahead, has a greater value than the entire market cap of our group today (£500m+)”.
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