Anyone but them! Boohoo offers Frasers a board seat, but not Mike Ashley

Boohoo is set to offer Frasers Group a seat on its board after the owner of Sports Direct made concessions on some governance issues.

However, the Manchester-based retailer said the “appropriate candidate” cannot be Mike Ashley or his partner, Mike Lennon, whom Frasers has been urging shareholders to name in an upcoming showdown.

Boohoo said the two men had “irreconcilable” conflicts of interest and that the board seat should be filled by someone who can meet the governance obligations it has demanded.

In a letter published on Thursday, Frasers said Ashley and Lennon were willing to comply with “all standard and commonly accepted market governance protocols.”

But the firm expressed its opposition to a “small number of undertakings” requested by Boohoo, claiming they lacked legal basis and were not approved corporate practices.

Frasers added that Boohoo had “grossly exaggerated any perceived conflict and governance issues”.

He also accused Karen Millen owner Chairman Mahmud Kamani of opposing Ashley and Lennon’s appointment to the board over “fears it would dilute their influence”.

The letter arrived on the same day that a second proxy advisor, Glass Lewis, urged Boohoo investors to vote against Ashley and Lennon becoming board members at a general meeting scheduled for December 20.

Frasers believes the pair would provide the leadership needed to revitalize Boohoo, whose shares have plummeted almost 90 per cent in the past five years.

However, Tim Morris, chairman of Boohoo, said the two men “are not suitable candidates to join the board in any circumstances, whatever commitments are offered”.

He added: ‘Despite this, Frasers continues to refuse to accept a number of key protections that the board would require if a suitable representative were appointed.

“These are key issues that must be addressed for the protection of all shareholders, and it is not for Frasers to choose which commitments it will make.”

Boohoo enjoyed huge growth during the early stages of the Covid-19 pandemic thanks to strict restrictions on physical stores that led Brits to buy their clothes online.

Trade subsequently slowed after restrictions were eased and shoppers began buying clothes in stores again.

Its sales then began to decline amid widespread cost-of-living pressures and growing competition from Chinese retailers Shein and Temu.

In the last financial year, Boohoo’s turnover plummeted by more than £300m to £1.5bn, while its pre-tax losses rose by around three quarters to £159.9m.

Boohoo Group Shares rose 1 percent to 35.1 pence on Friday morning, while Frasers Group Shares They were 0.6 per cent lower at 620 pence.