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Boohoo Names Finley as CEO against Frasers Demand to Pick Mike Ashley

FILE PHOTO: A woman poses with a smartphone showing the Boohoo app in front of the Boohoo logo on display in this illustration taken September 30, 2020. REUTERS/Dado Ruvic/Illustration/File Photo
FILE PHOTO: A woman poses with a smartphone showing the Boohoo app in front of the Boohoo logo on display in this illustration taken September 30, 2020. REUTERS/Dado Ruvic/Illustration/File Photo
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Boohoo Names Finley as CEO against Frasers Demand to Pick Mike Ashley

FILE PHOTO: A woman poses with a smartphone showing the Boohoo app in front of the Boohoo logo on display in this illustration taken September 30, 2020. REUTERS/Dado Ruvic/Illustration/File Photo
FILE PHOTO: A woman poses with a smartphone showing the Boohoo app in front of the Boohoo logo on display in this illustration taken September 30, 2020. REUTERS/Dado Ruvic/Illustration/File Photo

British online fashion retailer Boohoo on Friday appointed Dan Finley as its new CEO, effective immediately, in a blow to top investor Frasers which had attempted to appoint its controlling shareholder Mike Ashley to the role.
Boohoo's shares rose 3% on the news of the appointment of Finley, who is currently head of Boohoo's digital department store unit Debenhams and who will replace John Lyttle.
Frasers last week requisitioned a general meeting at Boohoo to appoint British entrepreneur Ashley as CEO. A week prior, Boohoo had said Lyttle would step down and also announced a strategic review that could see it broken up.
Controlled by Ashley, the British sportswear and apparel retailer is Boohoo's biggest shareholder with a stake of about 27%.
Boohoo's board was unanimous in its decision to appoint Finley as CEO, the company's Deputy Chairman Alistair McGeorge said in a statement.
Frasers did not immediately respond to a Reuters request for a comment.
Under Finley's leadership, Debenhams has a gross merchandise value (GMV) annual run rate of about 800 million pounds ($1.03 billion) due to a capital-light and cash generative model, Boohoo said.
Analysts at Jefferies said the GMV was well ahead of the brokerage's estimate earlier this year of about 400 million pounds.
Boohoo, in response to Frasers last week, had said it was willing to discuss board representation but that there needed to be "appropriate governance" to protect its commercial position.
Boohoo had noted that Frasers also owns a 23.6% stake in ASOS, which operates in similar markets to both Boohoo and Frasers.
Frasers also owns stakes in the likes of British luxury brand Mulberry, where a takeover attempt by Frasers failed last month, and British electronics retailer AO World .
It also invested 150 million pounds in Debenhams, which went out of business in 2021 and was bought by Boohoo out of administration.

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Fashion

Kering Warns on Annual 2024 Operating Profit as Gucci Sales Fall

This photograph taken during a presentation press conference in Paris on March 22, 2013 shows the new name and logo of French luxury and retail group PPR which will become officially Kering after its approval by the annual general meeting to be held on June 18. (AFP)
This photograph taken during a presentation press conference in Paris on March 22, 2013 shows the new name and logo of French luxury and retail group PPR which will become officially Kering after its approval by the annual general meeting to be held on June 18. (AFP)
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Kering Warns on Annual 2024 Operating Profit as Gucci Sales Fall

This photograph taken during a presentation press conference in Paris on March 22, 2013 shows the new name and logo of French luxury and retail group PPR which will become officially Kering after its approval by the annual general meeting to be held on June 18. (AFP)
This photograph taken during a presentation press conference in Paris on March 22, 2013 shows the new name and logo of French luxury and retail group PPR which will become officially Kering after its approval by the annual general meeting to be held on June 18. (AFP)

French luxury goods group Kering warned on Wednesday its full-year operating income would almost halve after reporting a larger-than-expected drop in third quarter sales, as weak demand in China deepened the struggles of its main label Gucci.

Revenue for the group which also owns fashion brands Saint Laurent, Balenciaga and Bottega Veneta, was 3.79 billion euros ($4.08 billion), a 16% decline on an organic basis.

The figure was worse than an analyst consensus estimate of an 11% decline, according to a Barclays note.

Kering said its 2024 recurring operating income could be about 2.5 billion euros, following the larger-than-expected slowdown in the third quarter, compared with 4.75 billion euros a year earlier.

Kering's warning comes as the luxury sector suffers a slowdown, with luxury bellwether LVMH last week missing expectations and flagging a drop in Chinese consumer confidence to COVID-era lows, with a deterioration in demand for high end fashion over the quarter.

Sales at Gucci, which accounts for half of annual group sales and two-thirds of profit, continued to slide and were down 25% in the quarter, compared to analysts' consensus expectations for a 21% decline.

"We are executing a far-reaching transformation of the group, and at Gucci in particular, at a time when the whole luxury sector faces unfavorable market conditions," Kering Chair and CEO Francois Henri Pinault said in a statement.

Kering has been managing a broad overhaul of the century-old Italian fashion house, rebuilding top executive teams and introducing a new streamlined design style under the artistic direction of Sabato de Sarno, while pushing the products upmarket.

The group said in a statement that the overhaul of Gucci's leather goods category, with the introduction of a host of new products late in the quarter, was well underway.

Earlier this month, it named Stefano Cantino as CEO effective from January, replacing longtime Kering executive Jean-Francois Palus who held the role for an interim period since last year.