Mike Ashley’s empire tightens grip on Boohoo as crunch vote nears

Mike Ashley’s Frasers Group has continued to up its stake in Boohoo as a war of words over the future of the fast-fashion giant rumbles on.

The owner of the likes of Sports Direct and House of Fraser now has a 28 per cent stake in the Manchester-headquartered group, which itself features brands such as Debenhams and Prettylittlething.

According to a new filing with the London Stock Exchange, Mike Ashley’s retail empire increased its holdings in Boohoo from 27 per cent.

The rise comes after Boohoo urged its shareholders to reject Mike Ashley’s demand to be placed in charge of the group, saying that that billionaire is “not suitable” and subject to conflicts of interest due to his role at Frasers.

The two London-listed groups have been engaged in a public disagreement over how to take Boohoo forward for the last month.

Frasers Group has previously accused Boohoo of “long-term mismanagement” that has led to “value destruction“, and has criticised its £222m refinancing, while Boohoo has called Frasers’ take on the business “inaccurate and unfair”.

Ashley’s bid to become chief executive suffered a blow recently when Boohoo appointed Dan Finley to the role.

However, investors will be able to vote on whether to appoint Mike Ashley, as well as restructuring specialist Mike Lennon, to the board on 20 December.

Losses widen at Boohoo ahead of Mike Ashley vote

Earlier this week, Boohoo announced a fundraise of £39.3m and a separate £6m retail offer.

It also revealed that its revenue had fallen by 15 per cent in the first half of its financial year, from £729.1m to £619.8m, while its adjusted loss before tax widened from £9.1m to £27.4m.

Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) fell 10.5 per cent, from £31.3m to £20.8m. 

Net debt increased from £35m to £143.1m, and Boohoo said it saved £128m in operating costs year on year. 

The last time Frasers Group increased its stake in Boohoo was at the end of October when it upped its stake from 26.1 per cent to 27 per cent.