Boohoo appoints insider as CEO in snub to Mike Ashley

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Boohoo, the British fast-fashion retailer, has promoted an insider to group chief executive, in a reversal of sportswear magnate Mike Ashley, who had demanded to be installed as head of the group.

Dan Finley, who runs Boohoo-owned Debenhams, will replace outgoing Boohoo Group boss John Lyttle “with immediate effect”, Boohoo said on Friday.

The decision comes after Ashley’s Frasers Group, Boohoo’s biggest 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 Ashley’s experience and ability and who is able to replace Mr Lyttle as soon as possible”. The retailer, which owns around 27 per cent of Boohoo, called for an extraordinary meeting of its investors and criticized 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’ proposal. Shares in Boohoo rose 2.5 percent in early London trading.

Last week, the retailer said it had to “protect its commercial position” in response to Frasers’ requests, due to 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 “careful consideration”, noting that both Frasers and Asos compete in similar markets.

Alistair McGeorge, Boohoo’s deputy chairman, said the decision to appoint Finley, who was previously a director at JD Sports, was unanimous, calling 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 chairman and co-founder of Boohoo, in recent months over Boohoo’s pitch.

Clive Black, head of consumer research at Shore Capital, said: “One senses that the exchange between Boohoo and elements of the Frasers’ camps may have been the most colorful yet, but we await to see if there will be more knockout punches. .”

Boohoo shares have fallen more than 90 percent since their peak in mid-2020 as the retailer was fueled 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 has previously lost a battle with Boohoo for control of Debenhams following the department store’s collapse in 2019. The company also struck Boohoo’s deal to buy ailing fashion rival Missguided in 2022 and bought competitor I Saw It First, set up by Kamani’s brother.