Shares in fast fashion group Boohoo have recovered from a historic low as the battle over its future took another twist ahead of a crunch vote before Christmas.
The Manchester-headquartered group, whose brands include Debenhams and Prettylittlething, suffered a slump in its share price in July from 35p to 27p.
However, shares in Boohoo have now recovered to where they were before the dip as a row over its future direction and leadership rumbles on.
Despite the recent rise, Boohoo’s shares are still lower than the 41p they were trading at in January 2024.
They are also a shadow of the 413p price they commanded at the height of the Covid-19 pandemic.
However, this morning’s rise came as a prominent shareholder advisory firm urged Boohoo investors to reject Mike Ashley’s bid for a seat on the fashion retailer’s board when the company holds an emergency meeting later this month.
Boohoo said Institutional Shareholder Services (ISS) had recommended shareholders vote against the plans on 20 December.
The fashion group is embroiled in a war of words with businessman Mike Ashley’s Frasers Group, which has a 27 per cent stake in Boohoo.
On Sunday, in an open letter to shareholders, Ashley attacked the company for having an “egotistical founder who has an unhealthy grip on the board” and said it was “in desperate need of the guidance I can provide”.
He also warned against a turnaround that sees the “fire sale of assets at knockdown prices”, including the Debenhams brand which he said should not be sold.
Ashley said his motivation for seeking to become Boohoo’s chief executive was to help the brand and “prevent any dishonest profiteering” off investors.
In response, Boohoo insisted that Ashley was pursuing his own commercial interests rather than that of its shareholders.
On Monday, Boohoo said in a statement: “ISS states that Frasers has offered a superficial view of performance and no specific plans for change and the two Frasers candidates, Mike Ashley and Mike Lennon, have real conflicts of interest, concluding that board change at Boohoo Group is not warranted.”
Chairman Tim Morris said the board “welcomes the backing of ISS, which is in line with the recommendation we have made to reject the proposals from Frasers Group”.
Shareholders will have the opportunity to vote on Ashley’s attempt to gain a seat on the company’s board before Christmas.
Boohoo’s share price is on its knees
AJ Bell investment analyst Dan Coatsworth said: “Boohoo says it is not deliberately seeking confrontation with Frasers, yet this is more than just a simple war of words.
“Its battle against the Sports Direct retailer is being played out in the public domain for all to see.
“Each week brings a new form of attack from one side or the other, the latest being Boohoo latching onto a recommendation from proxy adviser ISS to vote against Frasers’ quest to get Mike Ashley a seat on Boohoo’s board.
“Recommendations from ISS or fellow proxy adviser Glass Lewis rarely form the backbone of an announcement to the stock market, but Boohoo has seized upon ISS’s latest recommendation to launch another attack on Frasers.
“This follows comments at the weekend from Mike Ashley that Boohoo must avoid a ‘fire sale’ of assets.
“The fate of Boohoo will be in the hands of its shareholders when they vote on 20 December.
“At 35.88p, Boohoo’s share price is on its knees, trading at a fraction of the 400p+ level seen in 2020.
“Long-suffering shareholders might welcome someone of Ashley’s calibre joining the board and offering a different viewpoint to revive the business.
“Equally, some shareholders may not take kindly to his vulture-like tendencies and view a board appointment as a pre-cursor to Frasers muscling in and taking Boohoo out on the cheap.
“What’s certain is that both parties are going to be working flat out over the next 11 days to get their viewpoint across and win over Boohoo shareholders.”