‘A simple choice: win with Mike Ashley or lose with Mahmud Kamani.’
That was the stark title of the latest open letter from Frasers Group to boohoo’s shareholders this morning.
The two sides have been locked in a bitter dispute in recent months over the direction and performance of the online fashion retailer.
Only last week, Frasers, which owns 27 per cent of boohoo’s shares, sent another open letter to boohoo’s board following the appointment of Dan Finley as John Lyttle’s successor as CEO – contrary to their demands to make Mike Ashley chief executive.
Boohoo responded by announcing this morning the appointment of Tim Morris as the company’s independent chair with co-founder Mahmud Kamani stepping into the role of executive vice chair with immediate effect.
However Frasers have opted for the nuclear option by calling for Kamani to be removed completely.
The open letter has been written by Chris Wootton, a director at Frasers Group, and states: “Recent events at boohoo should leave shareholders in no doubt – Mahmud Kamani, boohoo’s executive chairman, must go.
“Frasers has today requisitioned a further shareholder meeting of boohoo to give shareholders the opportunity to remove Mr Kamani as a director of boohoo.
“Frasers urges boohoo shareholders to vote to appoint Mr Ashley and Mr (Mike) Lennon as directors of boohoo at the shareholder meeting, with a meeting date set for Friday 20 December 2024.
“Frasers also urges shareholders to vote for the removal of Mr Kamani when the board convenes a separate shareholder meeting.
“Frasers firmly believes that these appointments and Mr Kamani’s removal are in the best interests of boohoo, its shareholders and its stakeholders.”
Frasers claim a combination of boohoo’s poor financial results, a lack of transparency and further supply chain allegations, mean Kamani ‘must go’.
The letter claimed boohoo’s share price is 93 per cent off its highs while describing Ashley as a ‘proven retailer with an outstanding track record for value creation’ and pledged to ‘return to a winning mentality at boohoo’.
It stated: “Over the last five years, Frasers’ share price has increased 122 per cent compared to boohoo’s decline over the same period of 90 per cent.
“We, the shareholders, have suffered for long enough. It is time for change. The chaos at boohoo must end and Mr Kamani must go.
“The solutions here are clear and two-fold: Mr Ashley and Mr Lennon must be appointed as directors of boohoo, as the only hope of turning boohoo’s fortunes around for all stakeholders.
“It is clear that the time has now come for Mr Kamani, boohoo’s executive chairman, to go.”
The open letter from Frasers Group continued: “Since 2016, Frasers has more than doubled its profits and Mr Ashley plans to bring this same success to boohoo.
“The scandals must end once and for all and the current board, led by Mr Kamani, is clearly not in a position to end these.”
The open letter from Frasers Group coincides with boohoo’s latest update to the LSE this morning that Tim Morris has been appointed independent chair.
Boohoo insist ‘conflicted’ Ashley would be wrong choice as CEO
Kamani has also reconfirmed his agreement to provide assurances around his relationship with the company as a major shareholder.
Morris said: “I am delighted to be appointed by the board as chair of boohoo. My appointment follows a series of decisive steps taken by the board since launching its business review, including the completion of the refinancing, the appointment of Dan Finley as our new CEO and the successful fundraising.
“I am excited to lead boohoo through the next phase of its development, alongside Dan and the wider board, with the focus on delivering maximum value for, and protecting the interests of, all shareholders.”