By James Davey
LONDON (Reuters) – British retail tycoon Mike Ashley has failed in his attempt to be appointed to the board of Boohoo after shareholders in the struggling online fast-fashion group voted against the move.
Boohoo said 64% of votes cast at its investor meeting on Friday opposed the election of Ashley, the founder and majority shareholder of rival Frasers, to the board. Frasers is Boohoo’s biggest shareholder with 28%.
The same percentage of votes cast also opposed the appointment to the board of restructuring professional Mike Lennon.
Boohoo, like UK peer ASOS, was a winner during the pandemic, which drove a boom in online shopping. It has struggled since, hurt by supply chain problems, higher product returns, competition from rivals such as Shein and Temu and subdued consumer demand.
In mid-October, Boohoo said its then CEO John Lyttle would step down. It announced a strategic review that could see the group broken up and a new 222 million pound ($278 million) debt facility.
A week later, Frasers requisitioned a shareholder meeting, calling for both Ashley and Lennon’s appointment to the Boohoo board. A two-month war of words followed.
With Boohoo’s share price down by 90% in five years, Ashley accused its board of “gross mismanagement”. He said he could bring “fresh ideas” and sought to avoid a fire sale of assets, including Boohoo’s Debenhams business, and explore options for more cost-effective financing.
Boohoo opposed Ashley and Lennon’s appointment, citing “irreconcilable conflicts of interest”. It did, however, say it would be willing to offer Frasers a board seat if it put forward an appropriate candidate.
Investor advisers Glass Lewis and Institutional Shareholder Services also recommended shareholders vote against Ashley and Lennon’s appointment.
“We remain focused on delivery of our Business Review with the objective of unlocking and maximising value for all shareholders,” Tim Morris, Boohoo’s independent non-executive chair, said.
Frasers has been asked for comment.
Another Boohoo shareholder meeting on Jan. 21 will vote on Frasers’ separate resolution to remove Mahmud Kamani, Boohoo’s co-founder and executive vice chair from the board. Kamani holds 12.5% of Boohoo.
(Reporting by James Davey; Editing by Susan Fenton, Kirsten Donovan)
