Ashley warns Boohoo against ‘fire sale’ of assets in combative letter

Mike Ashley has called the co-founder of Boohoo “egotistical” and accused the struggling fast-fashion group’s board of creating a “catastrophic mess” through “gross mismanagement”, as he intensifies his campaign to force his way on to it.
In a letter to “long-suffering” Boohoo shareholders before a vote on December 20 on whether to appoint Ashley, the founder of Frasers Group, and the restructuring expert Mike Lennon as directors, he said Debenhams should remain part of the Boohoo group and that “critical to that turnaround will be avoiding a fire sale of assets at knockdown prices”.
There is a growing dispute between Manchester-based Boohoo and Frasers, which owns 28 per cent of the London-listed fashion retailer.
Boohoo announced the surprise departure of its boss John Lyttle in October, alongside a £222 million debt refinancing and a strategic review of options.
The review has raised the prospect of a break-up of the retail group, whose collection also spans PrettyLittleThing, Dorothy Perkins, Burton, Warehouse and Wallis.
It has also raised speculation about the motivation of Ashley, including possible designs on Debenhams, in seeking to become Boohoo’s chief executive and to oust Mahmud Kamani, a co-founder.
Kamani was removed from his role as chairman and made executive vice-chair last month after Frasers expressed concerns over his leadership. Frasers, which owns Sports Direct, Flannels and House of Fraser, is also seeking a shareholder vote to remove Kamani as a director.
In his letter, Ashley said Boohoo’s shareholders should “have every right to feel angry and frustrated” at the board’s “gross mismanagement” in driving the share price down 90 per cent in five years.
He wrote: “I see brands that are underperforming and no clear strategy to halt the decline. I see panic-driven mismanagement resulting in reckless decisions that are obliterating shareholder value and jeopardising the company’s future. The recent game of musical chairs — appointing Dan Finley as CEO, Mahmud Kamani as executive vice-chairman and Tim Morris as chairman — is the epitome of chaos, a desperate attempt to mask dysfunction at the top.”
He accused Boohoo of “resorting to distractions, raising conflict concerns and painting me as a threat”, which he called “a weak and self-serving defence driven by an egotistical founder [Kamani] who has an unhealthy grip on the board, and one designed to play on fear and protect the status quo”.
Ashley said he met last week with Finley, who had served as Debenhams’ chief executive since 2022, and they discussed the “enormous potential to scale” its brand and that he was “excited at the prospect of working collaboratively with Dan to turn around the group”.
If “non-core” assets were deemed necessary to sell, Ashley said he would insist on independent advisers and shareholder consultation before any decisions, and vowed that Frasers would support efforts for “more cost-effective and sustainable financing” to avoid a fire sale.
Ashley also vowed that if he became a director of Boohoo he would not “provide any confidential information about Boohoo to Frasers, take on any board position at Frasers, discuss Boohoo or its business with Frasers, or accept any board position at any competitor to Boohoo”.
Responding to the letter, a spokesman for Boohoo said Ashley was seeking a board seat for “his own interests, not those of Boohoo’s shareholders”, adding: “Frasers’ track record of leveraging investments in companies for its own commercial advantage is plain for all to see. Boohoo’s independent board, on the other hand, is focused on maximising value for all its shareholders.”
Last week Frasers, which has bought up stakes in retailers including Asos, Hugo Boss and Mulberry, downgraded its own full-year profit forecast, blaming lower consumer confidence and budget measures, which further weakened its share price. The stock is down by about 28 per cent this year and Frasers is being demoted from the FTSE 100 as part of a quarterly review of London’s main listings indices.
Separately, three police forces have recently confirmed they are investigating claims of stalking of Boohoo executives and “corporate espionage”.