The boohoo (LSE: BOO) share price has been picking up a bit in the past few months. But anyone who’s held for any length of time has had a painful ride. It’s down a horrible 88% over five years.
We’ve seen Frasers Group backer Mike Ashley trying to get himself appointed to the role of CEO. And with Frasers being a key boohoo shareholder, and Ashley having a track record of relishing taking charge at struggling retailers, some might have seen that as a way forward.
But on 1 November, boohoo named Dan Finley as its new CEO with immediate effect. He was formerly with JD Sports Fashion, and had been at the helm of boohoo’s Debenhams.
The share price uptick since then suggests boohoo shareholders are on board with this appointment.
Time running out?
The problems are far from solved at boohoo, and Finley has his work cut out. My big worry is that I fear he might not have much time to weave a bit of magic before the pressures mount even more.
But the changes have already started happening. On 13 November, boohoo revealed it had successfully raised £39.3m from a placing and subscription, which it described as having been “significantly oversubscribed“.
As part of the refinancing, the company has now repaid £50m of its £97m term loan.
Crucial AGM
That’s helped with boohoo’s balance sheet health. But there’s still infighting going on which should peak at the Annual General Meeting (AGM).
Frasers want to get Ashley and insolvency expert Mike Lennon on the board. But boohoo’s management say they’d be happy to offer one board seat to “an appropriate candidate for the role of non-executive director,” excluding those two.
The AGM takes place today, (20 December). So we’ll soon know what shareholders think of the outcome, whichever way it goes.
Next steps
We could see boohoo emerge from this current crisis with a new CEO at the helm, a beefed-up balance sheet, and a new plan.
“Under my leadership we have had great success with Debenhams and I look forward to exploring opportunities to extend this business model across the Group,” said the new boss on his appointment.
And so far, the halt in the share price slide makes it look as if shareholders are happy to give him the chance. But there are competitive times ahead, especially with Chinese online fashion business Shein making inroads into the market.
The road ahead
The key issue the company now needs to face is that forecasts still show losses until at least 2027, although declining.
If the board, under the new CEO, can accelerate that recovery, I could see the market getting back on board. So what I really want to see is boohoo beating 2025 expectations.
At the moment, most analysts have boohoo as a sell, with a price target ranging 18.5p-36p. With the shares at 34p, at the time of writing, that’s not a vote of confidence.
I’m not going to top up right now, but I do have hopes for the new managerial direction.
