Sportswear tycoon Mike Ashley has failed to convince a majority of Boohoo’s shareholders to support his bid to join the board of the fast-fashion retailer.
Ashley’s Frasers Group had been lobbying shareholders to vote in favor of proposals for the British billionaire and his associate, Mike Lennon, to join Boohoo’s board, but only about 36% gave their support to the appointments on Friday. Almost 64% of the votes cast went against the proposals.
Frasers, which is Boohoo’s largest shareholder with a 28% stake, had recently accused the retailer’s leadership of engaging in “blatant hypocrisy” in their attempts to block Ashley from joining its board. The group had also warned that Boohoo was at risk of suffering “further value destruction,” after its shares had already fallen more than 90% since their peak in June 2020.
Boohoo had countered with the claim that Frasers was waging a campaign aimed at “disrupting” and “destabilizing” its operations to further its own commercial self-interest. Boohoo contends that Frasers has conflict of interest because it’s also holding a significant stake in rival online retailer Asos.
The accusations were just the latest skirmish in a war of words between the struggling retailer’s current management and its largest shareholder that dragged on for months.
After Friday’s vote, Boohoo’s Chairman Tim Morris expressed his gratitude to the retailer’s shareholders for their support.
“We remain focused on delivery of our Business Review with the objective of unlocking and maximizing value for all shareholders,” he said.
Another shareholder meeting in January will determine whether to adopt Fraser’s proposal remove Mahmud Kamani, Boohoo’s cofounder and executive vice chair, from the board.
Boohoo is under mounting pressure from shareholders to turn its fortunes around. The Manchester-based online retailer, whose portfolio of brands includes Debenhams, Karen Millen and PrettyLittleThing, has seen its sales falling amid rising competition from the Chinese online seller Shein as well as traditional retailers.
In October, Frasers had proposed that Ashley become Boohoo’s CEO, but the company’s board promoted Dan Finley to the position instead. Finley had been running Debenhams online store for the past two years and previously worked at JD Sports, a rival to Ashley’s Sports Direct.
Ashley founded Sports Direct in 1982 and then expanded his portfolio of businesses through a long series of high-profile acquisitions, including House of Fraser and department store chain Flannels. Ashley’s wealth is currently valued $4.4 billion on the Forbes Real-Time Billionaires List.