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Business

Boohoo names Finley as CEO against Frasers demand to pick Mike Ashley

Published by Uma Rajagopal

Posted on November 1, 2024

Featured image for article about Business

By Yadarisa Shabong

(Reuters) -British online fashion retailer Boohoo on Friday appointed Dan Finley as its new CEO, effective immediately, in a blow to top investor Frasers which had attempted to appoint its controlling shareholder Mike Ashley to the role.

Boohoo’s shares rose 3% on the news of the appointment of Finley, who is currently head of Boohoo’s digital department store unit Debenhams and who will replace John Lyttle.

Frasers last week requisitioned a general meeting at Boohoo to appoint British entrepreneur Ashley as CEO. A week prior, Boohoo had said Lyttle would step down and also announced a strategic review that could see it broken up.

Controlled by Ashley, the British sportswear and apparel retailer is Boohoo’s biggest shareholder with a stake of about 27%.

Boohoo’s board was unanimous in its decision to appoint Finley as CEO, the company’s Deputy Chairman Alistair McGeorge said in a statement.

Frasers did not immediately respond to a request for a comment.

Under Finley’s leadership, Debenhams has a gross merchandise value (GMV) annual run rate of about 800 million pounds ($1.03 billion) due to a capital-light and cash generative model, Boohoo said.

Analysts at Jefferies said the GMV was well ahead of the brokerage’s estimate earlier this year of about 400 million pounds.

Boohoo, in response to Frasers last week, had said it was willing to discuss board representation but that there needed to be “appropriate governance” to protect its commercial position.

Boohoo had noted that Frasers also owns a 23.6% stake in ASOS, which operates in similar markets to both Boohoo and Frasers.

Frasers also owns stakes in the likes of British luxury brand Mulberry, where a takeover attempt by Frasers failed last month, and British electronics retailer AO World.

It also invested 150 million pounds in Debenhams, which went out of business in 2021 and was bought by Boohoo out of administration.

($1 = 0.7745 pounds)

(Reporting by Yadarisa Shabong in Bengaluru; Editing by Janane Venkatraman, Kirsten Donovan)