Mike Ashley may not be up to Boohoo job

The pantomime season is not yet upon us. But who cares about that? Over at Boohoo, the scene is set for a twist on The Little and Large Show: out the door goes John Lyttle and in, as replacement chief executive, comes none other than Big Mike Ashley.
Or that, at least, is the script the Frasers founder is ostensibly pushing in what is shaping up into a delightful showdown with the man behind Boohoo — its executive chairman Mahmud Kamani.
Ashley is the No 1 investor in the fast fashion group, with 27 per cent — more than double Kamani’s 12.4 per cent, even if his family holds a further 7 per cent. And, as Frasers has written to the board, it’s sick of its “abysmal trading performance and share price collapse”.
So, what better than to requisition an EGM for an investor vote on making Ashley the new Boohoo boss, with some restructuring pal from Kroll, Mike Lennon, also hoping to muscle on to the board?No question, too, Ashley has grounds to be uppity. Kamani teamed up with executive director Carol Kane to co-found Boohoo in 2006, floating it on Aim at 50p in 2014. They then oversaw a meteoric rise, piloting the shares to 412p by June 2020, where the business was valued at £5 billion. Since then though, the online retailer behind PrettyLittleThing, Karen Millen and a virtual Debenhams has delivered a frocky horror show, not helped by slugging it out with the Chinese-founded rival Shein.
Boohoo shares have unravelled by 90 per cent — down to 28½p, even after a 4 per cent rise on the Ashley fireworks.
Ashley, who owns 73 per cent of Sports Direct owner Frasers, didn’t buy into Boohoo until June 2023, with the shares at about 40p. But Frasers says it’s made “repeated attempts to engage with the board”, including over a board seat. “We can recognise stonewalling when we see it”, it says, spoiling for a fight.
Still, it’s last Friday’s farrago that led Frasers to go public, concluding “the board has lost its ability to manage Boohoo’s business”. Then not only did it spring a pricey and short-dated £222 million debt refinancing on investors but lousy trading, a strategic review and the news Lyttle was off.
Provocation, indeed. Still, key question: does Ashley actually want to be chief executive or is he just angling for something else? Leverage to break-up Boohoo, say, and buy Debenhams, the business on which he blew £150 million before getting pipped by Kamani to acquire it out of administration? Or, Karen Millen, which could fit nicely with Frasers? Or maybe all of Boohoo, having destabilised it?
Frasers maintains Ashley is “the best solution to Boohoo’s leadership crisis” and that, given its share price, this is no time to be selling bits off. But when Ashley stepped down from the Frasers board in September 2022, he gave a strong hint that day-to-day management was no longer his thing, saying he’d be “helping the team as and when they require me”. In 2019, he told the BBC: “I’m not a clicks man … I’m a bricks man”. Yet, as an online business, Boohoo is built on clicks.
On top, becoming its boss would bring fiduciary duties to Boohoo. And, with them, heaps of conflicts — and not just with Frasers. Take Ashley already owning 23.6 per cent of Asos. Is it OK for a Boohoo boss to have such a big stake in a rival?
As it happens, sitting on the Asos board is William Barker of Camelot Capital, a fellow with 5.6 per cent of Boohoo, who alongside Schroders with 7.1 per cent, could now play a key role in delivering Ashley his new job. Always assuming, in this prodigious panto, that he really wants to wear the big Boohoo frock.
Finally, Unilever is starting to look like a fast moving consumer group. Hein Schumacher has only been in charge since July last year. But, it’s hard to disagree with Barclays analysts that “the turnaround appears in full-swing”.
Schumacher has swiftly sharpened things up by focusing on the 30 “power brands” responsible for more than 75 per cent of sales — the likes of Dove, Domestos and Knorr. Then, he’s opted to spin off the ice-cream brands, starring Magnum and Cornetto, by the end of next year, having spotted its sales are more volatile, while the supply chain is different — being frozen.
On top, he’s pushing through €800 million cost cuts, even at the loss of 7,500 jobs. He’s also got out of Russia for €520 million, with the money “in the bank”, he says. And he’s toned down the wokery that saw investor Terry Smith say the group had “lost the plot” in imbuing Hellman’s mayo with a “purpose”.
And now? He’s delivered third-quarter figures, with a decent return to volume growth, despite tricky trading in China. On revenues of €15.2 billion, underlying sales were up 4.5 per cent, including 3.6 per cent from higher volumes: a healthier mix than relying on price rises. The power brands beat that, up an underlying 5.4 per cent, built on 4.3 per cent extra volumes. Much of this, he says, comes from focusing on “doing fewer things better and with greater impact”. As for the shares, they rose 3 per cent to £47.90, up from around £41 when he took charge. A good start all round.
No wonder Abrdn has a hands-off wishlist for the budget. After the latest £3.1 billion of quarterly outflows sent its shares down 11 per cent to 145½p, the last thing it needs is Rachel Reeves triggering a further exodus from its funds. Even so, Abrdn is also right, particularly on pensions. As Noel Butwell, boss of its Adviser wing, puts it: “A tax grab on pensions is no way to nurture a culture of saving, least of all when government is trying to boost pension investment”. You’d think that would be obvious to the chancellor.