What is the expression?
All the world likes a ‘trier’!
And certainly, that is how I consider Mike Ashley, especially in his recent efforts to gain more retail sector dominance.
Don’t get confused with the term ‘chancer’ because, unless you know differently, I do not believe Ashley to be such a person.
Just like a footballer running around the field making tackles here, there and everywhere but, as yet, to really score – Ashley charges include N Brown, AO World, Currys,
Mulberry, THG, ASOS, Hornby and boohoo Group.
To Fight Or To Back Away
Whatever he may be to others, I consider that he does not suffer fools, nor does he back away from confrontation.
He has had several skirmishes in the publicly-quoted sector, as well as taking on the investment bankers Morgan Stanley, which confused his efforts way back in 2021 when going after the Hugo Boss empire.
In 2022 he had a battle with the Debenhams board, having built up a near 30% stake in the retail giant, ahead of its subsequent collapse.
The Debenham brands and its relative websites were later sold to the boohoo Group, the online fashion retailers.
Ashley even had problems with the Premier League and his Newcastle United football club.
Ashley is obviously not at all daunted by taking on those who may be against him.
The boohoo fracas
The Manchester-based boohoo Group (LON:BOO) is the fashion business built up in 2006 by Mahmud Kamani and Carol Kane.
Serving a broad customer base, globally, with a primary focus on the UK and US markets, its five core brands being - boohoo, boohooMAN, PrettyLittleThing, Karen Millen and Debenhams.
It is now undergoing an ‘unlocking of shareholder value’ under the control of new CEO Dan Finley.
It is said to be losing money ‘hand over fist’, with quadrupled losses being recently reported.
According to market and retail sector observers, the whole business is in a very poor state both financially and organisationally too – with supply chain concerns and a leadership crisis becoming even more apparent.
It is said to be desperate for funding to back up its operations, despite last Wednesday launching a £39.3m Placing and Subscription of new shares @ 31p each.
The market whispers suggest that the group could not have got that issue out of the way at 31p if it had not been for Mike Ashley’s continued accumulation of boohoo Group shares – he is by far and away the group’s biggest shareholder, with 355,446,168 shares in the company, some 28% of its equity.
Ashley’s Demands
To date boohoo has rejected Mike Ashley’s various approaches to take over as CEO, as well as insisting that the Board of the online retailer have a ‘third party’ acceptance of any disposals that may ensue in the ‘strategic review’, there have been strong rumours that the Kamani family could be buyers of certain assets.
The boohoo Rejection
On Friday 20th December the boohoo Group has called a General Meeting and pleaded with its shareholders to reject the demands of Ashley’s Frasers Group (LON:FRAS), contending that ‘Frasers appears intent on disrupting boohoo's Business Review and acting only in its own commercial self-interest.’
Deutsche Bank Call boohoo A ‘Sell’
In the meantime, I noticed that even after last week’s cash raise, Deutsche Bank warns that further cash will be needed.
Their analyst Alison Lygo has kept on her ‘Sell’ recommendation, with a Target Price of 26p on the online fast fashion retailer, which climbed 3.1% to 30.9p yesterday.
reduce group borrowings – first half net debt totalled £143m – which compares to facilities of £222m currently, that reduce to £125m in August 2025,’ Lygo said.
Lygo states that:
“Although the business continues to explore ways to release shareholder value, including the sale of its Soho office, and while the fundraise will go some way to strengthening the balance sheet, we expect further cash will need to be released ahead of August 2025.”
In My View
We shall just have to wait until mid-December to see what the outcome will be, in the meantime Ashley will, no doubt, be interested to note what goes on at tomorrow’s AGM for the handbag maker Mulberry Group (LON:MUL), 110p, which will also be announcing its Interim Results – he has a 37% stake in this loss-maker too.
The £392m valued boohoo closed at 30p, while Frasers, £3.37bn, were 15p better at Fridays close at just 748p.
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