All eyes are on Boohoo Group’s new chief executive Dan Finley who is tasked with not only turning around the struggling online fashion group but dealing with disgruntled shareholder Mike Ashley.
Finley’s appointment has further riled up Ashley.
The retail entrepreneur, who owns a 27% stake in Boohoo via Frasers Group, branded his hire as “desperate” after Boohoo ignored Ashley’s request to put him in the hotseat.
Ashley claimed last month that Boohoo “urgently needs to address the management of its business” after what he termed an “abysmal performance” and put himself forward as the solution to their problems.
The fashion group has been battling with plunging profits and weak sales over the past couple of years, reporting in its most recent half that revenue dropped 15% to £620m.
Boohoo is placing its bets that Finley, who has been calling the shots at Debenhams for the last two years, will be able to drive the same growth across the wider business.
His largest shareholder may not be on board, but is Finley the right man for the job and can he silence Mike Ashley’s doubts?
Who is Dan Finley?
The new chief executive been leading the successful turnaround of Debenhams since January 2022 after Boohoo rescued its brand name and website out of administration for £55m in 2021.
The former department store chain is now described by the group as a “capital-light, cash generative and highly profitable [online] marketplace”, stocking 10,000 brands across fashion, home and beauty and delivering an annual gross merchandise value of around £800m.
Finley, who will continue to run Debenhams in his new role, is no stranger to the world of ecommerce having spent a decade as group multichannel director at JD Sports.
He is credited with transforming the sports giant’s online business into a “global multi-billion pound, multichannel business unit”, which helped push the listed retailer to becoming part of the FTSE 100.
His experience of driving international growth and taking innovative approaches to performance marketing is something Finley has sought to replicate at Debenhams, with the online department store preparing to launch sites in Ireland and Australia in the coming months.
Prior to JD Sports, he was the group business development director at Peacocks and Bonmarche owner The Peacock Group. He has also worked with New Look and M&S at retail consultancy firm Javelin Group.
Peel Hunt retail analyst John Stevenson praises the appointment, describing Finley as “the best internal candidate” after doing a “great job at Debenhams”.
“If you look at the wider Boohoo Group, Debenhams has had a very strong growth profile over the last two or three years while the core brands have struggled to redefine their relevance in the current market.”
He notes that Finley has been good in building brand awareness that Debenhams “is still around” through category expansion, internationalisation and winning the customer back – something he says is key when looking to revive the Boohoo and PrettyLittleThing brands.
Straight into business
Finley assumes the position of group CEO while it undergoes a strategic review, which is understood to include the possibility of breaking up the group’s eight brands.
“We’ve started a process just recently,” he told Drapers last week. “I don’t want to pre-judge it. It’s underway and we look forward to engaging with relevant parties on that.”
The new chief executive also hinted that he was looking to replicate the marketplace model he has adopted at Debenhams.
“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,” he said.
Hargreaves Lansdown head of money and markets Susannah Streeter says: “Finley will have his work cut out, given that group revenue and profits both fell at double-digit rates in the first half.
“It’s going to be a tough road ahead, given how competitive the retail space is right now, particularly with the might of Shein and Temu disrupting the online fashion space.
Stevenson warns that potential spin-offs of the group’s brands “don’t address the core issue”.
“Whether you were to retain or sell Karen Millen or Debenhams, it’s not turning around PLT or Boohoo and that needs to be the absolute focus.”
Streeter agrees that “finding new ways of revitalising its young fashion brands such as PrettyLittleThing…would be far more likely to move the dial”.
Similarly, independent analyst Nick Bubb calls Finley a “rising star”, but also warns that “he won’t find it easy to drive better trading in Boohoo’s fast fashion brands, given the weight of competition from Shein”.
Boohoo v Mike Ashley
Adding to the growing list of challenges on his plate, Finley also faces restlessness from the fashion giant’s largest shareholder Frasers, which has already claimed “incompetence” and accused the retailer of taking a “step backward” following its £222m refinancing deal.
The appointment of a new CEO, with a proven track record of leading digital growth, has done little to settle Ashley’s qualms about the business.
He told The Sunday Times in an email: “Independent shareholders be warned, desperate people do desperate things.”
After a decade at Sports Direct’s nemesis JD Sports, Finley will have encountered a combative Ashley before.
He was quick to address the feud last week and told Drapers: “We absolutely want to engage [with Frasers Group]. We will try and find a solution. I’m looking forward to engaging with all of our shareholders and all of our stakeholders.”
Stevenson brands Ashley’s feud as a “significant distraction” for the new boss and the business, especially as one of his biggest tasks is focusing on turning the business around.
While its largest shareholder may not have welcomed the appointment, the market is feeling positive about the news and has sent shares up more than 8% since Friday’s announcement.
Boardroom battles aside, one thing that’s certain is that Boohoo has put a man who knows what he’s doing when it comes to ecommerce in charge. If he can work his magic across the group as he has done in Debenhams, even his fiercest critic may be silenced.
Click here to sign up to Retail Gazette‘s free daily email newsletter
