Frasers Group (LON: FRAS) issued an open letter to the Boohoo (LON: BOO) board on Thursday, calling for the appointment of a new CEO.
In the letter, Frasers expressed deep concern over Boohoo's “abysmal trading performance and share price collapse.” The company's revenue has declined by 36.5% over the past two years, and Frasers believes that the current board has “lost its ability to manage Boohoo's business and investments.”
“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 6th consecutive reporting period,” said Frasers.
Frasers proposed that Mike Ashley, the founder and former CEO of Frasers, be appointed as the new CEO of Boohoo. Ashley has a proven track record in the retail industry and could bring much-needed leadership to the struggling company.
“The Board has presided over a long-term collapse in Boohoo's share price,” said Frasers Group. “Appointing Mr. Ashley as a director and CEO of Boohoo is the best solution to Boohoo's leadership crisis.”
Frasers has requisitioned a general meeting of boohoo shareholders to vote on the appointment of Ashley. The company is urging shareholders to support its proposal and help to restore value to Boohoo.
Boohoo shares are up over 3% on Thursday, but the stock is down over 28% in 2024, trading at just over 28p a share, significantly off its 2020 highs of over 400p.
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