Sports Direct tycoon Mike Ashley has demanded to be made chief executive of fast fashion brand Boohoo.
In a move that lines Mr Ashley up for an ‘explosive’ showdown with billionaire Boohoo heir Umar Kamani, the retail veteran called for an urgent meeting to allow shareholders to vote on his appointment.
Mr Ashley’s retail empire Frasers, which is Boohoo’s largest shareholder with a 27 per cent stake, yesterday sounded the alarm over a ‘leadership crisis’ at the brand and blasted its ‘abysmal trading and share price collapse’.
Shares were up 3.9 per cent, or 1.1p, on the day at 28.5p.
In a furious letter, sent days after chief executive John Lyttle announced he would step down, Frasers accused the Boohoo board of ‘stonewalling’ and ‘persistent failure’ to engage.
Sports Direct tycoon Mike Ashley (pictured in February) is demanding the top job at Boohoo
It comes a day after Mr Ashley gave up his attempt to buy Mulberry after the firm rejected his second bid worth £111million in a victory for its biggest shareholder, the billionaire Ong family.
He has demanded a seat for his firm on the handbag maker’s board.
Frasers yesterday called for an urgent meeting to let Boohoo shareholders vote on the proposal to appoint Mr Ashley chief executive and restructuring expert Mike Lennon as a director.
It said it had been ‘left with no option but to take action itself to provide a solution to Boohoo’s leadership crisis’ after the board ‘stone-walled’ its approaches.
‘These tactics of delay and ignore are no longer tolerable in the context of the continued value destruction the board is overseeing at Boohoo,’ it said, adding it was ‘critical for Boohoo’s success that shareholders urgently be given the opportunity to appoint to the board experienced individuals capable of delivering the necessary changes to deliver long-term value for all shareholders’.
Frasers will approach other shareholders via their proxy advisers to drum up support.
In reply, Boohoo said it was ‘in the process of reviewing the content and validity’ of Frasers’ demand for a meeting with its advisers.
Billionaire Boohoo heir Umar Kamani is pictured with his wife Nada Kamani in London in June
Frasers sent a furious letter days after Boohoo chief executive John Lyttle (pictured in Los Angeles in 2019) announced he would step down
The demand could spark a power struggle between Mr Ashley and Mr Kamani, 36, the billionaire founder of Pretty Little Thing, which is owned by Boohoo.
The son of Boohoo co-founder Mahmud Kamani, he has been tipped to take over from Mr Lyttle.
Analysts at Shore Capital said the battle could be an ‘explosive blockbuster event’ that would make Mr Ashley’s Mulberry bid ‘look very tame’.
It added in a note to investors: ‘We would suggest shareholders await the outcome of the boardroom tussle, maybe with popcorn to hand.’
Mr Lyttle, who joined from Primark in 2019, will stay until a successor is found.
Boohoo shares have fallen 90 per cent in the past five years despite a boost during the pandemic.
Recent figures showed sales plunged 15 per cent to £620million in the six months to August 31.
Boohoo co-founders Mahmud Kamani & Carol Kane with boss John Lyttle in New York in 2022
Profits slumped to £21million from £31million a year before.
The retailer has faced competition from rival fast fashion brands including China’s Shein.
It has also come up against High Street retailers such as Next and M&S tempting shoppers back into shops post-lockdown.
Boohoo has axed more than 1,000 jobs this year and taken on a £222million debt facility to fund the next stage of its restructuring.
The debt deal is a key complaint in Frasers’ letter, which said Boohoo failed to engage with it on this.
Boohoo last week also launched a strategic review that throws into question the future of its Karen Millen and Debenhams brands.
It also owns Oasis, Coast and Warehouse.
