As if fund managers had not spaffed enough of other people’s cash on Boohoo.com (BOO) over the years, a book build announced after hours yesterday has been heavily oversubscribed with £39.3 million raised at 31p. Retail mugs are now being offered the chance to put in an additional £6 million. I just do not get it.
Ashley’s Frasers Group (FRAS) owns c27% of the equity in Boohoo (BOO). The Kamani family of chairman Mahmud own c20%. So if a GM is held Mahmud is going to have to get Schroders (7%) and other sub 3% IIs and private investors on board and hope that private investors, whether thirsty retail experts or otherwise, break his way. Why the hell should they after years of financial and corporate governance disasters. The letter from Frasers demanding a GM to appoint Ashley as a director and CEO and his sidekick Mike Lennon as a director is damming.
We know that creaking Boohoo.com (BOO) is losing money and is struggling with imminent repayments of a portion of its debt mountain. But the Telegraph carries a report which suggests that the debt crisis is worsening.
As I never cease reminding folks, one day debt has to be repaid or refinanced. And if you are losing money, burning cash, your corporate governance is off the scale appalling, that could be a problem. On that basis is Boohoo (BOO) screwed? At just 28p, enough to turn its higher profile fans to drink, the market cap is £358 million.
The BBC's Panorama programme last night exposed Boohoo (BOO) yet again. This time it was for sticking labels saying “Made in the UK” on tatty clothes aimed at teenage morons which were actually made in Pakistan. You might think this a minor transgression although Trading standards folks will be having a word, but it is symptomatic of the rot at the heart of Boohoo in two ways.
Last week the Daily Telegraph reported that investors were suing Boohoo (BOO) over the allegations of modern-day slavery. Today another bombshell lands c/o the BBC’s Panorama team who planted an undercover reporter, Emma Lowther, with the company.




