Boohoo shareholders have blocked Mike Ashley and an associate from joining its board in a blow to the Sports Direct founder’s attempt to control the struggling online fashion retailer.
Investors representing 64% of Boohoo’s stock voted against appointing Ashley and Mike Lennon at a special meeting on Friday morning called by Ashley’s Frasers Group.
The chair of Boohoo, Tim Morris, said shareholders had given “a resounding vote of confidence in our board” at the meeting.
He said 99% of those that voted – excluding the 27% stake in Boohoo controlled by Ashley’s Frasers Group – had chosen to block Ashley’s appointment.
Morris said Boohoo would now “like to get on with running our business”, although it is not clear how Frasers will respond to the vote.
Boohoo became a target after its value plunged from its peak during the Covid-19 pandemic to a low when the online shopping bubble burst as spending moved back to the high street.
Further potential conflict lies ahead. Frasers has already called a second meeting – for 21 January – to ask shareholders to oust the Boohoo founder and vice-chair, Mahmud Kamani.
Ashley had sought to become the chief executive of Boohoo but was blocked by the company from putting that proposal to shareholders.
He then offered to “work collaboratively” with the new Boohoo boss, Dan Finley, if he won a board post. However, he has criticised Kamani for being an “egotistical founder who has an unhealthy grip on the board”. He also said Boohoo was “in desperate need of the guidance I can provide”.
Finley, who was promoted from his role as head of Boohoo’s Debenhams online department store after driving growth there, said he was “really excited about the opportunities ahead”.
Boohoo has said Frasers could put forward an alternative to Ashley to represent its interests. However, Morris said any candidate would have to meet certain conditions to ensure there was not a conflict of interest given Frasers’ position as a competitor.
Ashley has made Boohoo the latest in a long line of targets for his corporate empire which includes brands ranging from House of Fraser and Flannels to Evans Cycles and Game UK.
Morris has said Ashley and Lennon were “not appropriate candidates to join the board in any circumstances” because of “obvious conflict points.”
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