Boohoo has suffered another financial setback after an Israeli bidder pulled out of talks to buy its London office.
The company was set to sell its Soho office for £60m to cover a looming debt repayment of £47m due in August 2025. The fast-fashion company bought the property for £72m in 2021.
The news comes ahead of a crucial shareholder meeting on 20 December, where investors will be asked to vote on whether to appoint Frasers owner Mike Ashley and restructuring specialist Mike Lennon to the board.
Ashley has warned against a “fire sale of assets at knockdown prices” by Boohoo as it attempts to navigate tumbling sales amid competition from fast-fashion giants Shein and Temu.
Saying it “has lost its ability to manage Boohoo’s business and investments”, Frasers also warned that Boohoo’s “debt refinancing are wholly unsatisfactory”, calling it “a backwards [move] for the company and an appalling outcome for shareholders.”
It said this “long-term mismanagement” had led to the collapse of Boohoo’s share price earlier this year, although the price has since rebounded. It rose nearly 30 per cent in December.
Ashley has also 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”.
Last week, however, prominent shareholder advisory firm Institutional Shareholder Services (ISS) urged Boohoo investors to reject Mike Ashley’s bid for a seat on the fashion retailer’s board.
For its part, Boohoo has insisted that Ashley was pursuing his own commercial interests rather than that of its shareholders and has continuously pointed to its belief in its own turnaround plan.
Ashley had previously attempted to become chief executive but suffered a blow when Boohoo appointed Dan Finley to the role.
In its latest half-year results, Boohoo announced that revenue had fallen 15 per cent, while adjusted operating profit fell 10.5 per cent and net debt increased by over £100m.
City AM has contacted Boohoo for comment.