Mike Ashley Seeks CEO Role Amid Boohoo’s ‘Leadership Crisis’ as Frasers Calls for Change
Mike Ashley of Frasers Group has made a public appeal to become the new chief executive officer and board director of Boohoo Group, a move he says is essential to address what he describes as a “leadership crisis” that has contributed to declining revenues and a sharp drop in share price. Frasers, Boohoo’s largest shareholder with a 27 percent stake, issued an open letter calling for a shareholder meeting to facilitate leadership changes, including the potential addition of Mike Lennon as a board director, via the Guardian.
The leadership void follows the departure of Boohoo’s CEO, John Lyttle, a shift that Frasers argues presents an opportunity to reshape Boohoo’s strategy. The letter, addressing Boohoo’s board and shareholders, stressed that the appointments of Ashley and Lennon represent “the only way to set a new course for Boohoo’s future,” urging shareholders to vote for their appointment.
Frasers’ concerns are compounded by Boohoo’s “abysmal trading performance,” with revenue falling 36.5 percent over the six-month period ending August 31, 2024, and a share price drop of 17 percent in the past three months. The lack of reference to cost-saving measures in Boohoo’s recent Business Update on October 18 has further fueled Frasers’ claims that the board “has lost its ability to manage Boohoo’s business and investments.” Additionally, Frasers highlighted an unsatisfactory approach to debt refinancing and questioned Boohoo’s exploration of options to unlock shareholder value without consulting major shareholders.
Frasers also expressed frustration over delays in board engagement, claiming Boohoo had “ignored and dismissed” multiple constructive proposals. A recent meeting between Frasers and Boohoo management on October 18 provided no “satisfactory explanation” regarding past inconsistencies in board communications, with Frasers stating that the proposal to appoint Ashley had been met with a “holding response.”
The letter underscored Frasers’ belief that Boohoo’s board has failed to adequately respond to shareholder concerns: “For too long, this board has ignored the views of shareholders and refused to meaningfully engage with their ideas. But no longer. We are requisitioning a shareholder meeting to provide a referendum on the large-scale value destruction and long-term and continued incompetence of the current board and to provide a solution to Boohoo’s leadership crisis.”
Simultaneously, Boohoo announced an “identity refresh,” which it described as an “exciting new era for the global retailer.” The brand’s overhaul includes a custom-designed logo and a new color palette of blush and concrete tones, part of a campaign titled “People will talk…” that Boohoo hopes will “change the rhetoric and usher in a new Boohoo era.” Marketing director Sam Leach stated, “Our team has worked tirelessly to bring the vision to life… People will always talk about us, so get ready… the Boohoo renaissance has begun.”
The letter from Frasers and Boohoo’s brand relaunch signal two diverging visions for the company’s future amid ongoing shareholder unrest.