Mike Ashley tells Boohoo to make him the boss

The retail tycoon Mike Ashley has launched a bold attempt to become chief executive of Boohoo as he pushes for a possible merger between the troubled fast-fashion retailer and its rival Asos.
The proposal by Ashley’s Frasers Group would reshape the online fashion retail landscape, aiming to consolidate two of the UK’s biggest digital players while expanding his influence over the industry.
The group behind Sports Direct, House of Fraser and Flannels, which has a significant stake in both Boohoo and Asos, is thought to see value in combining Asos’s access to brands with Boohoo’s appeal to a younger demographic. It also sees it as an opportunity for Frasers Plus, its buy-now-pay-later service, The Times understands.
Both Asos and Boohoo have struggled following the arrival of ultra-fast fashion rivals such as Shein. Shares in both Asos and Boohoo are down by about 90 per cent over the past five years.
Asos is understood to be against the merger option, however, as it does not wish to be associated with Boohoo’s brands.
Frasers called for Boohoo to replace John Lyttle, its outgoing chief executive, with Ashley in an open letter after news that the company could be broken up.
Ashley’s retail group owns 27 per cent of Boohoo and has warned that the fast-fashion outlet “urgently needs to address the management of its business” owing to its “abysmal trading performance and share price collapse”. The FTSE 100 group said that appointing Ashley to the top job would be “the best solution to Boohoo’s leadership crisis”.
In the letter Frasers said: “The company’s revenue for the six-month trading period ending August 31 2024 is down around 36.5 per cent. We expect that gross profit will follow the declining trend of revenue, and when Boohoo announces its half-year results in full in November, gross profit will be down for the sixth consecutive reporting period.
“The board has presided over a long-term collapse in Boohoo’s share price, which has fallen over 29 per cent year to date, and 17 per cent in the last three months.”
Frasers also accused Boohoo of failing to properly respond to its demands for a refresh of the board. Frasers said it had been subjected to “delay and ignore” tactics when trying to hold a meeting with Mahmud Kamani, the executive chairman.
The letter said: “We recognise stonewalling when we see it, and these tactics of ‘delay and ignore’ are no longer tolerable in the context of the continued value destruction that the board is overseeing at Boohoo.”
Boohoo announced a strategic review of options “to unlock and maximise shareholder value” last week, raising the prospect of brands such as PrettyLittleThing, Dorothy Perkins, Burton, Warehouse and Wallis being sold. Frasers is understood to be concerned that Kamani wants to buy back the brands himself.
The review has also set the stage for a boardroom tussle between Ashley and Kamani, who are long-term rivals. A confrontation has been brewing since Frasers started building a stake in Boohoo in June 2023.
The pair are said to have had a row over FaceTime recently. Somewhat surprisingly, Sir Philip Green, the former “king of the high street”, was said by one source to be the middleman trying to restore calm between the two. The row came after Boohoo was forced to retract its multimillion-pound executive bonus payouts in May and to cancel a vote on its incentive plan after a backlash from investors.
Clive Black of Shore Capital said: “Whether this is good for Boohoo shareholders remains to be seen. One senses it may not be all bad albeit the extent to which Frasers has a conflict as a firm that may want say Debenhams in its one fold whilst being a potential CEO of Boohoo is an interesting one. Get out the popcorn.”
In a statement, Boohoo said: “The Boohoo board is in the process of reviewing the content and validity of the requisitions with its advisers. A further announcement will be made in due course.”