Boohoo raises £39m in investor cash appeal as Frasers boardroom dispute continues

Online retailer Boohoo has raised approximately £39.3m through an investor cash call as it deals with escalating losses and a growing dispute with Mike Ashley’s Frasers Group.

Boohoo expressed satisfaction with the level of shareholder support demonstrated in the fundraise, with retail investors expected to participate in an additional £6m share placing. However, this comes shortly after Boohoo released delayed results showing that half-year losses had more than quadrupled.

The company also urged investors to reject Mr Ashley’s bid to appoint himself as chief executive at an emergency meeting on December 20. Boohoo's unexpected interim results, released after market close on Wednesday, revealed pre-tax losses had ballooned to £147.3m in the six months to August 31, up from losses of £36.6m the previous year.

Concurrently, Boohoo confirmed it was bracing for a face-off with Mr Ashley’s Frasers – a significant shareholder in Boohoo. Frasers had been advocating for Boohoo to appoint its founder, Mr Ashley, as leader following the resignation of the previous CEO in October.

Recently, Boohoo appointed ex-Debenhams boss Dan Finley as its new CEO, a move Frasers labelled as "rushed". In October, Boohoo also announced plans for a strategic review, fuelling rumours about a potential split of the business, which encompasses brands like Oasis and Coast.

Frasers Group fired off an open letter last week, slamming Boohoo for allegedly attempting to "block the say of shareholders" and demanding that Boohoo "will not make a disposal of any asset or business line, in whole or in part, without prior shareholder approval".

However, Boohoo has hit back at Frasers, accusing them of "promoting its own commercial self-interest" while disregarding other investors. On Wednesday, Boohoo stood firm, claiming it "has a credible plan to unlock and maximise value for the benefit of all shareholders".

Frasers, holding a 27% stake in Boohoo, has even launched a website titled "Boohoo deserves better", intensifying its campaign for a boardroom shake-up. Despite suffering significant losses, Boohoo's new chief Mr Finley remained optimistic in Wednesday's results, highlighting "has seen positives" in the first half with growth in beauty, Debenhams Marketplace, and the Karen Millen brand.

Acknowledging the hurdles, he noted: "There have been challenges and we continue to operate within a volatile market."