Boohoo has a plan and it doesn’t include Frasers Group’s Mike Ashley.
Frasers is the largest stakeholder in Boohoo at 27 percent, but the British fast-fashion e-tailer doesn’t want any influence from Ashley on how to run its business.
Boohoo disclosed on Thursday that it raised 39 million pounds ($49.8 million) in a share placement. The raise reportedly includes Boohoo co-founder Mahmud Kamani, some of his relatives and Frasers, according to a Bloomberg report, which also said that Boohoo disclosed that its adjusted pretax losses widened to 27.4 million pounds ($34.6 million) for the first half ended Aug. 31 from a pretax loss of 9.1 million pounds ($11.5 million) a year ago. Documentation on the Boohoo share raise was limited to investors in the U.K., per regulatory rules.
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Frasers began acquiring shares of Boohoo in June and became its largest shareholder in October. Since then there’s been speculation on Frasers’ reasons for the buying spree. And given Frasers’ track record, there was early speculation that Ashley have been plotting a takeover of the struggling fashion firm. While the clothing retail empire is now run by CEO Michael Murray, regulatory filings show that former CEO Ashley is the “controlling” stakeholder of Frasers.
Earlier this month, the Boohoo board named Dan Finley as CEO, just days after Ashley tried to push himself into the top post. Former Boohoo CEO John Lyttle said in October that he was stepping down after five years. Finley is the former head of Debenhams.
After the loss of the CEO post, Ashley is now reportedly demanding a seat on Boohoo’s board at the annual shareholders’ meeting next month. That’s a move that Boohoo is telling shareholders to reject.
Separately, Four Marketing, a distribution agency backed by Ashley’s Frasers Group, has acquired A-Cold-Wall from fashion brand distributor Tomorrow. Tomorrow acquired full control of A-Cold-Wall from founder Samuel Ross less than a year ago, according to WWD, which also noted that Ross, who no longer has any ties to his former firm, is now involved in a new, slow fashion project called Samuel Ross_Atelier.
