Boohoo shareholders vote against Mike Ashley as fast fashion soap opera continues

Frasers Group’s attempts to put Mike Ashley on the board of online retailer Boohoo have failed miserably.

Boohoo shareholders rejected two resolutions at a general meeting in Manchester on Friday that would have appointed Ashley and his partner, insolvency expert Mike Lennon, to positions on the board.

Only about 36 percent of votes cast in both resolutions supported Ashley and Lennon’s respective nominations, with the remaining 63.8 percent against.

Proxy advisers ISS and Glass Lewis opposed his appointment, as did Boohoo’s board, partly over governance issues and conflicts of interest.

Boohoo, owner of Dorothy Perkins and PrettyLittleThing, offered last week to give Frasers a seat on the board, as long as it wasn’t Ashley or Lennon.

But Frasers believed the two men’s leadership was necessary to turn around Boohoo, whose shares have plummeted about 90 per cent in the past five years.

In a letter from OctoberThe FTSE 250 company accused Boohoo bosses of overseeing “large-scale value destruction and ongoing, long-term incompetence”.

He also claimed the Manchester-based company had used “delay and ignore” tactics by failing to “engage meaningfully” in its proposals for board representation.

The letter was published in October after John Lyttle announced he was stepping down as chief executive of Boohoo after five tumultuous years in the role.

But rather than accept his suggestion to appoint Ashley, Boohoo decided to appoint Debhams boss Dan Finley as Lyttle’s replacement.

Commenting on Friday’s shareholder meeting, Finley said: ‘Our group is a dynamic company, with great brands and extremely talented people, supported by best-in-class infrastructure.

‘Since my appointment, I have hit the ground running, taking immediate and decisive action to maximize and unlock value for all shareholders.

‘I am very excited to realize the significant opportunities I see for this business. I still believe this group is materially undervalued.

“Our most important work is ahead and we will create value for all shareholders.”

Like many e-commerce companies, Boohoo enjoyed breakneck growth during the early part of the Covid-19 pandemic, when governments imposed severe restrictions on trading in “non-essential” stores.

Its sales then slowed significantly after restrictions were eased before falling due to cost of living pressures and increasing competition from Chinese fast fashion retailers Shein and Temu.

In the last financial year, the group’s turnover fell by more than £300m to £1.5bn, while its pre-tax losses soared 76 per cent to £159.9m.

Boohoo Group Shares rose 1.6 percent to 33.3 pence on Friday afternoon, while Frasers Group Shares They rose 4 percent to 634 pence.