Second proxy advisor backs Boohoo over Mike Ashley board ambitions

Another proxy advisory firm has spoken out against Frasers Group’s bid to elect Mike Ashley and his partner Mike Lennon to Boohoo’s board.

Glass Lewis has followed Institutional Shareholder Services in calling on Boohoo investors to vote against the couple’s appointment at the general meeting on December 20.

Frasers believes selecting Ashley and Lennon would provide the leadership needed to revive the fortunes of Boohoo, whose shares have fallen almost 90 per cent in the past five years amid waning sales.

He has accused the group’s current management of incompetence and presiding over “large-scale value destruction”, and Frasers previously called for Ashley to be installed as chief executive of Boohoo.

But in a major snub, Boohoo appointed Debenhams boss Dan Finley as a replacement for John Lyttle, who resigned as chief executive in October after a tumultuous five years in the role.

Glass Lewis said Boohoo shareholders “would be ill served to support the appointment of the dissident nominees (Mike Ashley and Mike Lennon) at this time”.

It warned that putting a director with “significant historical links” to Frasers on the board and without necessary measures to alleviate potential conflicts of interest “could raise further concerns among investors”.

This echoes a similar point raised on Monday by the ISS, which said Ashley and Lennon had “genuine conflicts of interest.”

Glass Lewis also said Frasers’ failure to provide the required governance commitments “may suggest that its intentions are not fully aligned with the interests of the company’s broader shareholder base.”

Finley said: “I am encouraged by Glass Lewis’ support, which highlights the critical importance of protecting Boohoo’s independence and ensuring decisions are made in the best interests of all shareholders.”

“With the support of our independent board, led by Tim, my priority is to advance Boohoo as a disruptive company and industry leader.”

Boohoo, the owner of Burton, Dorothy Perkins and PrettyLittleThing achieved significant growth during the early part of the Covid-19 pandemic, when tough restrictions on physical stores encouraged Brits to buy their clothes online.

Trade then slowed sharply after restrictions were eased and shoppers returned to buying clothes in stores.

Sales then declined as inflation pressures worsened and competition from rivals such as Chinese retailers Shein and Temu intensified.

For the financial year ending February, Boohoo’s revenue fell by more than £300m to £1.5bn, while its pre-tax losses soared by around three quarters to £159.9 million pounds.

Boohoo Group Shares rose 0.35 per cent to 34.6p on Thursday morning, while Frasers Group Shares They were down 0.2 percent at 623 pence.