Kamala Harris v Donald Trump? Mike Tyson v Jake Paul? Rachel Reeves v the bond market? All lightweight conflicts compared to what’s going down at Boohoo Group PLC (AIM:BOO).
Just last month, the struggling online retailer was given the generous opportunity to welcome Frasers Group PLC (LSE:FRAS) founder and majority owner Mike Ashley as the new group chief executive.
As one of Britain’s most prolific businessmen, it was not an offer to be taken lightly, yet lightly it did appear to be taken.
Boohoo has instead opted for an internal hire with Dan Finley, the current boss of Boohoo’s Debenhams retail chain, to the head of the group’s entire operations.
The appointment is a major snub to Frasers, which has a substantial stake in Boohoo, with the kicker being that Finley’s CV includes 10 years as a director at Frasers’ high-street rival JD Sports Fashion PLC (LSE:JD.).
Neither Ashley nor Frasers has commented on the snub yet (Proactive has made a request), but according to Shore Capital Markets’ Clive Black, the campaign might not be over yet.
“Mr Ashley has sought to be CEO of Boohoo and it is far from certain that he will not succeed, even with this appointment of Mr Finley,” said Black. “The Boohoo board may be unanimous in its approval of Mr Finley but it is others who will ultimately make the choice.
“One senses that exchanges between the Boohoo and elements of the Frasers’ camps may have been most colourful to date, but we await to see if there will be more knock-out blows to come, with interest.
“We did say that this may be a blockbuster and both parties are not disappointing. More popcorn please!”
Whatever the motivation, Finley comes with robust credentials, both from his time at JD Sports and his current role as head of Debenhams.
Boohoo a hold
Boohoo’s value destruction over the past few years is in plain sight for all to see (shares are down a shocking 92% since early 2020), yet Black sees sparks of potential in the business.
“Whilst we still harbour concerns about the trading performance of Boohoo, its medium-term financial constitution and, frankly, poor brand perception, which involved some well-documented appallingly bad behaviour that has been evident and overseen by both existing executive and non-executive directors, we believe that it is wise to retain our hold stance for now on the group’s share and await the outcome of the fight,” he said.
For now, Boohoo shares saw a 4.6% uplift following news of Finley’s promotion.