Struggling online retailer Boohoo has raised around £39.3 million through an investor cash call as it grapples with deepening losses and a mounting spat with Mike Ashley’s Frasers Group.
Boohoo said it was “pleased” with the level of shareholder support shown in the fundraise, with retail investors set to be able to take part in a further £6 million share placing.
But it comes just hours after Boohoo released delayed results showing half-year losses more than quadrupled and as it urged investors to reject Mr Ashley’s attempt to install himself as chief executive at an emergency meeting on December 20.
There have been challenges and we continue to operate within a volatile market
Boohoo’s unscheduled interim results after market close on Wednesday showed pre-tax losses swelled to £147.3 million in the six months to August 31, from losses of £36.6 million a year earlier.
At the same time, Boohoo confirmed it was heading for a Christmas showdown with Mr Ashley’s Frasers – a major shareholder in Boohoo.
Frasers had been pushing for Boohoo to appoint its founder Mr Ashley at the helm after the previous chief executive stepped down in October.
Boohoo recently appointed former Debenhams boss Dan Finley as its new chief executive, something Frasers said was “rushed”.
Also in October, Boohoo announced plans for a strategic review, sparking speculation about a potential break-up of the business, which includes brands such as Oasis and Coast.
An open letter from Frasers last week accused Boohoo of trying to “block the say of shareholders” and demanded that Boohoo “will not make a disposal of any asset or business line, in whole or in part, without prior shareholder approval”.
But Boohoo has hit back at Frasers, accusing it of “promoting its own commercial self-interest” at the expense of fellow investors.
On Wednesday, Boohoo insisted it “has a credible plan to unlock and maximise value for the benefit of all shareholders”.
Frasers – which has a 27% stake on Boohoo – has even set up a website, “Boohoo deserves better”, as it steps up its bid for a boardroom coup.
Despite the dire losses, Boohoo’s new boss Mr Finley said in results on Wednesday that the group “has seen positives” in its first half, pointing to growth in beauty, Debenhams Marketplace and its Karen Millen brand.
“There have been challenges and we continue to operate within a volatile market,” he added.
