Boohoo Issues Frasers Group Response

Following the letter from Frasers Group (LON: FRAS) on Thursday, Boohoo (LON: BOO) swiftly responded, saying it continues the process of reviewing the requests with its advisers, including the proposal to appoint Mike Ashley as its new CEO.

In a statement released today, Boohoo's board highlighted its commitment to “unlock and maximise shareholder value” through a strategic review of its divisions.

Frasers Group, which holds a significant stake in Boohoo, had called for a change in leadership, citing the company's declining performance and share price.

However, Boohoo has dismissed these concerns, asserting that its ongoing review process is the best way to address the company's challenges.

While Boohoo remains open to discussing board representation with Frasers, it has made it clear that any new appointments must adhere to “appropriate governance” to protect the company's commercial position and the interests of all shareholders.

“Both Frasers and ASOS operate in similar markets to Boohoo. These are important facts that need to be taken into account and carefully considered by the Board,” said Boohoo. “Whilst the Board remains willing to discuss Board representation with Frasers in a constructive manner, it has been clear with Frasers that before any appointment can be made, appropriate governance will be required to protect the company's commercial position and the interests of other shareholders.”

The online fashion retailer said it has sought assurances from Frasers in this regard and they have not been provided so far.

The Boohoo board has also rejected Frasers' characterisation of Boohoo's recent debt refinancing as inaccurate and unfair, stating that the transaction provides certainty for the company's future and is supported by its existing group of high street banks.

Boohoo added that the approach to its recent debt refinancing was discussed numerous times with Frasers.

“As part of the discussions Frasers were advised that the Board would be pleased to consider any alternative proposals they might wish to present, but none were forthcoming,” said the online retailer.

Boohoo is set to release its interim results in November. Its shares are down around 0.4% Friday after an almost 4% rise on Thursday. This year, Boohoo shares have declined over 28%.