Dec 12, 2024, 9:42 AM
Dec 9, 2024, 12:00 AM

ISS slams Mike Ashley's Frasers Group as superficial in Boohoo takeover battle

Highlights
  • Boohoo's shares have significantly declined, dropping nearly 90 percent over the past five years due to declining sales and competition.
  • Mike Ashley seeks to join Boohoo's board, arguing that his leadership would revive the company's fortunes.
  • Boohoo has received backing from two major proxy advisory firms, urging shareholders not to support Ashley's bid, reflecting concerns over conflicts of interest.
Story

In the United Kingdom, Boohoo is currently facing a significant challenge to its governance as Mike Ashley, founder of Frasers Group, is attempting to gain board control. Over the past five years, Boohoo has experienced a dramatic decline in its stock value, plummeting nearly 90 percent due to various market pressures and competition from low-cost rivals like Shein. Ashley's proposal includes appointing himself and Mike Lennon to the Boohoo board at the upcoming general meeting scheduled for December 20. In response, Boohoo has received backing from influential advisory firms like Institutional Shareholder Services (ISS) and Glass Lewis, who urge investors to reject Ashley's bid, citing potential conflicts of interest and a lack of genuine plans for improvement from Frasers Group. The company has also appointed Dan Finley, former CEO of Debenhams, to lead Boohoo, further emphasizing its intent to remain independent and restore its market position amid ongoing financial difficulties, including a reported drop in revenue of over £300 million and pre-tax losses of approximately £159.9 million for the financial year ending in February. The turmoil surrounding Boohoo highlights the intense competition in the fast-fashion retail sector, particularly against online platforms and global competitors that have facilitated changes in consumer shopping behaviors, especially post-COVID-19.

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