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Boohoo, the UK fast-fashion retailer, has promoted an insider to group chief executive, in a snub to sportswear tycoon Mike Ashley, who had demanded to be installed as boss of the group.
Dan Finley, who runs Boohoo-owned Debenhams, will replace departing Boohoo Group chief John Lyttle “with immediate effect”, Boohoo said on Friday.
The decision comes after Ashley’s Frasers Group, Boohoo’s largest shareholder, accused Boohoo of mismanaging its businesses and destroying shareholder value, and demanded Ashley be appointed chief executive.
Frasers said in an open letter last month that “there is no stronger candidate for CEO who has the experience and abilities of Mr Ashley and who is in a position to replace Mr Lyttle as soon as possible”. The retailer, which owns about 27 per cent of Boohoo, called for an extraordinary meeting with its investors and criticised the terms of a recent £222mn debt refinancing.
On Friday, Boohoo said it would respond “in due course” and again urged shareholders “to take no action” in response to Frasers’ proposals. Shares in Boohoo were up 2.5 per cent in early trading in London.
Last week the retailer said it needed to “protect its commercial position”, in response to Frasers’ requests, because of its stake in rival online retailer Asos, and called some Frasers’ criticism “inaccurate and unfair”.
Frasers, formerly Sports Direct, owns a 23.6 per cent stake in Asos, which Boohoo said needed to be “carefully considered”, noting that both Frasers and Asos compete in similar markets to it.
Alistair McGeorge, Boohoo’s deputy chair, said the decision to appoint Finley, who was previously a director at JD Sports, was unanimous, and called him an “outstanding leader”.
Lyttle, who was at the helm for five years, will remain available to Finley and the group to ensure a smooth transition, the company said.
Ashley has locked horns with Mahmud Kamani, executive chair and co-founder of Boohoo, in recent months, over the trajectory of Boohoo.
Clive Black, head of consumer research at Shore Capital, said: “One senses that exchanges between the Boohoo and elements of the Frasers’ camps may have been most colourful to date, but we await to see if there will be more knockout blows to come.”
Boohoo shares have plunged more than 90 per cent since their peak in mid-2020 when the retailer was buoyed by a boom in online shopping during the pandemic. It has since had to contend with subdued demand and higher day-to-day costs from factors including returns, as well as increased competition from rivals such as Shein and Temu.
Frasers previously lost a battle with Boohoo for control of Debenhams after the department store’s collapse in 2019. The company also gatecrashed Boohoo’s deal to buy ailing fashion rival Missguided in 2022, and bought competitor I Saw It First, set up by Kamani’s brother.
