Mike Ashley threatens WWE-style smackdown at Boohoo by demanding they make him chief executive
MIKE Ashley is threatening a WWE-style smackdown at Boohoo by demanding the retailer makes him chief executive.
Just one day after dropping a separate £111million bid for Mulberry, the sportswear tycoon has deployed his favoured tactic of a public “poison pen” letter to attack the online fast-fashion giant’s management team.
The missive, wired to the City yesterday morning, accused Boohoo of “abysmal” performance and “value destruction”.
Mr Ashley’s Frasers Group has steadily built up a 27 per cent stake in Boohoo — and now owns more than the founder and executive chairman Mahmud Kamani.
The letter from the former Newcastle FC owner claims the board had “lost its ability to manage Boohoo’s business and investments”.
Clive Black, analyst at Shore Capital, likened the explosive development of “the Ashley- Kamani bout” to “retail WWE”.
“Get out the popcorn,” he added.
Just last week Boohoo said it would address the 90 per cent collapse in its share price with a strategic review.
That could spell the break-up of its Pretty Little Thing, Karen Millen and Debenhams brands.
Meanwhile, chief executive John Lyttle said he would be stepping down after five years.
Mr Ashley said there was now a “leadership crisis” at Boohoo, which would only worsen its ongoing problems and delay a return to growth.
His letter stated that appointing Mr Ashley as a director and CEO was “the best solution” and it called for Mike Lennon, a partner at restructuring firm Kroll, to be installed on the board.
Mr Ashley’s public intervention comes after months of jostling behind the scenes.
The tycoon is thought to be particularly keen to gain control of Debenhams, which he tried to buy out of bankruptcy in 2020 — before Boohoo beat him to it.
Boohoo is likely to resist Mr Ashley’s demands and raise conflict of interest concerns, due to Frasers’ ownership of House Of Frasers.
In a terse statement, the retailer said yesterday: “The board is reviewing the content and validity of the requisitions with its advisers. A further announcement will be made in due course.”
Business analysis
MIKE Ashley is not one for the quiet life.
His motive for putting so much of Frasers Group cash into Boohoo initially appeared to be point-scoring against founder Mahmud Kamani.
Ashley, who has taken stakes in high street names like he’s placing bets at the Grand National, still reckons Kamani did him over in the battle to buy Debenhams.
So purchasing Boohoo shares on the cheap was like rubbing salt in Kamani’s wound that the retailer’s star had fallen.
A winning scenario for him now will be either he is installed in Boohoo and manages to sort out the company while making some cash thanks to an improved share price.
Or, Boohoo crumples and his score with Kamani will have been settled.
To Mike Ashley, retail is now almost a sport.
Odey rejoins firm
HEDGE fund manager Crispin Odey has rejoined the eponymous firm he founded after leaving last year in the wake of sexual misconduct allegations.
The tycoon made millions betting against the UK economy during Brexit — but his empire unravelled when the Financial Times reported complaints from several women of sexual harassment and assault.
Mr Odey was reappointed as a director of Odey Asset Management in late September, according to Companies House filings.
On the same day, nine partners resigned.
Barclays boosted
PROFITS at Barclays have risen by nearly a fifth as fewer people fall behind on debts.
Barclays is putting £82million aside for bad loans, a big drop from £267million last year.
The bank said that was due to “low delinquencies in UK cards, high-quality mortgage lending and the improved macroeconomic portfolio”.
Pre-tax profit was £2.2billion between July and September, up from £1.9billion last year.
Net interest income, the gap between borrower and saver charges, was £1.7billion.
Cost cutting and deals also helped.
Octopus bulb pay
OCTOPUS ENERGY says the Government has made £1.5billion from its rescue of bust energy supplier Bulb.
The windfall has been largely helped by falling wholesale energy prices.
Two years ago the Office for Budget Responsibility warned a bailout would cost taxpayers £6.5billion.
Octopus said it has paid over £3billion to the Government, which took Bulb into special administration.
The firm has overtaken British Gas as the biggest UK electricity supplier.
Magnum force at Unilever
UNILEVER has toasted its best growth in three and a half years as the Marmite to Magnum manufacturer’s turnaround takes shape.
Boss Hein Schumacher said his plan, which cuts 7,500 jobs, focuses on “doing fewer things, better”.
Underlying sales grew 4.5 per cent in the fourth quarter.
Investors were cheered by the fact the consumer goods giant is finally selling more goods, rather than just relying on endless price hikes.
Mr Schumacher said plans were on track to next year spin-off the £15billion ice cream wing, which includes Magnums — as promoted by Iggy Pop — Cornettos and Ben & Jerry’s.
A stock market listing is the preferred option, and there will be a tussle between London and Amsterdam to be the venue for the float.
The ice cream unit grew sales 9.8 per cent in the last quarter, faster than any other division.
Stocks shake-up
A PROTEIN shake business that counts Coleen Rooney as an investor went public yesterday in a rare London stock market listing.
Applied Nutrition was valued at £350million after listing its shares at 140p, nearer the bottom of its price range.
It is one of the biggest stock listings of 2024 as the number of firms floating has fallen by 85 per cent to just nine this year, said Dealogic data.
The supplements firm’s founder Thomas Ryder said: “This positions us ideally for our next step of development.”
Dunelm's booming
DUNELM has reported a 3.5 per cent rise in sales to £403million in the last quarter despite “volatile trading conditions”.
The home furnishings retailer said it had a boost from younger online customers after launching a student discount campaign.
The budget blues
CONSUMER and business confidence is falling ahead of the Budget, according to a trio of closely followed studies.
The GFK consumer index has fallen to its lowest level since March, dragged down by worries about the wider economic situation.
GfK’s Neil Bellamy said: “Consumers are in a despondent mood.”
Meanwhile, a consumer sentiment survey by PWC recorded the biggest quarterly drop since Spring 2022.
And the CBI said manufacturers’ confidence had dropped due to a slowdown in new orders.