Another proxy advisory firm has spoken out against Frasers Group’s bid to elect Mike Ashley and his associate Mike Lennon to the board of Boohoo. 

Glass Lewis has followed Institutional Shareholder Services in calling on Boohoo’s investors to vote against the pair’s appointment at 20 December general meeting.

Frasers believes that selecting Ashley and Lennon would provide the leadership required to revive the fortunes of Boohoo, which has seen its shares plunge almost 90 per cent over the last five years amid dwindling sales. 

It has accused the group’s current management of incompetence and presiding over ‘large-scale value destruction’, with Frasers previously calling for Ashley to be installed as Boohoo’s chief executive. 

But in a major snub, Boohoo named Debenhams boss Dan Finley as the replacement for John Lyttle, who stood down as CEO in October following five tumultuous years in charge.

Not supported: Proxy advisery firm Glass Lewis has spoken out against Frasers Group’s plans to appoint Mike Ashley (pictured) as Boohoo’s chief executive

Glass Lewis said Boohoo shareholders ‘would not be well served supporting the appointment of the dissident nominees [Mike Ashley and Mike Lennon] at this time.’

It warned that putting a director on the board with ‘significant historical ties’ to Frasers and without the necessary measures to alleviate potential conflicts of interest ‘could raise further concerns among investors.’

This echoes a similar point raised on Monday by ISS, which said Ashley and Lennon had ‘real conflicts of interest’.

Glass Lewis also said Frasers’ failure to offer the required governance commitments ‘may suggest their intentions are not fully aligned with the interests of the company’s broader shareholder base’.

Finley said: ‘I am encouraged by Glass Lewis’s support, which highlights the critical importance of protecting Boohoo’s independence and ensuring decisions are made in the best interests of all shareholders.

‘With the backing of our independent Board, led by Tim, my priority is to steer Boohoo forward as a disruptive and industry-leading business.’

Boohoo, the owner of Burton, Dorothy Perkins and PrettyLittleThing achieved significant growth during the early part of the Covid-19 pandemic as tough curbs on physical shops encouraged Britons to buy their clothes online.

Trading then slowed considerably after restrictions were relaxed and shoppers returned to purchasing apparel in stores. 

Sales then declined as inflationary pressures worsened and competition from rivals like Chinese retailers Shein and Temu intensified.

For the financial year ending February, Boohoo’s revenue shrunk by over £300million to £1.5billion, while its pre-tax losses soared by about three-quarters to £159.9million.

Boohoo Group shares were 0.35 per cent up at 34.6p on Thursday morning, while Frasers Group shares were 0.2 per cent down at 623p.

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