Grab the popcorn: Retail’s five most dramatic stories this year
From Boohoo’s boardroom dramas to The Body Shop’s salvation in the nick of time, 2024 has been a big year in retail.
City AM counts down its top five retail dramas this year (spoiler alert: Mike Ashley is at the centre of two of them).
Asda tumbles down the supermarket charts
Asda has faced a host of problems – internal and external – this year. Steadily declining market share, continued industrial action and a terribly expensive IT project (to the tune of half a billion) have all made the headlines, all while the company continued to look to cut costs in an attempt to deal with heavy post-takeover debt.
There’s been drama in the boardroom, too. This summer, then-Chair Lord Rose called for Mohsin Issa to step down as chair, saying he “wouldn’t encourage” the entrepreneur to intervene in operations.
Zuber Issa had already stepped away from the business at this point (he did so in June), but he was swiftly followed by Mohsin in September, and then Lord Rose himself in November.
Former chief executive Allan Leighton has been appointed executive chair, in the absence of a chief executive.
Asda faces a unenviable uphill climb in 2025.
Boohoo faces off with Frasers
In what probably takes the cake as the most dramatic retail story of the year, Mike Ashley’s quarrel with Boohoo has dominated headlines in the last few months.
Boohoo and Frasers were engaged in a very public disagreement over the future of the fast fashion retailer – Frasers has accused the retailer of “long-term mismanagement” which has led to “value destruction“, and has criticised its £222mn refinancing, while Boohoo has called Frasers’ take on the business “inaccurate and unfair”.
Mike Ashley’s big to become chief executive was snuffed when Boohoo appointed Dan Finley to the role, and he suffered another blow after failing to get a seat on the board last week.
More than 63 per cent of votes were cast against the appointment of the billionaire at a general meeting in Manchester. Almost the same number of votes were also cast against restructuring specialist Michael Lennon also taking up a board seat
Mulberry fights off… Frasers, again
In the second big story centred around Mike Ashley, Fraser’s attempted takeover of British luxury brand Mulberry failed to bear any fruit after the brand twice snubbed Frasers in October.
Fraser’s main problem was that it only owns 37 per cent of Mulberry, and needed the support of majority shareholder Challice to launch a successful takeover.
This was not forthcoming. Shortly after Fraser’s second bid, Challice announced it had “no interest in… selling its Mulberry Shares to Frasers”, adding that it was an “inopportune time” for Mulberry to be sold.
Mike Ashley stated that he didn’t want Mulberry to become “another Debenhams”. Frasers lost £150m after Debenhams collapsed in 2021. Hopefully 2025 doesn’t see that fear come to pass.
The Body Shop is saved from collapse
The stricken high street retailer came within an inch of collapse in July. Another victim of the ailing British High Street, The Body Shop went into administration in February with the closure of 75 shops and the loss of 489 jobs.
But a consortium led by British business tycoon Mike Jatania swooped in over the summer and agreed to buy The Body Shop out of insolvency.
It’s now headed up by ex-Molton Brown boss Charles Denton, who said he believed there’s a “sustainable future ahead… we aim to restore The Body Shop’s unique, value-driven, independent spirit.”
This Christmas, its festive ad announced it was “back for good”.
Burberry pulls itself out of the trenches
In early Autumn, it looked as if Burberry’s share price was set for a slow slide into the abyss. Down more than 90 per cent over 16 months, it dropped out of the FTSE 100 in September.
It has grappled with an uncertain brand identity as a succession of new leaders have brought a different vision to the brand, causing investors to lose confidence, as well as struggling to strike a balance between its heritage as a quintessentially British luxury brand and the need to appeal to a younger, more global audience.
Both shoppers and investors seemed to shun the retailer, which attributed its own decline to a “challenging macroeconomic environment” and the unfriendly effect of London’s ‘tourist tax’.
But this isn’t the first time Burberry has had to pull itself out of the trenches, and it seems set for a rebound in the new year thanks to a well-framed turnaround plan and the likely tick-up in global luxury spending.
Its share price has been steadily climbing since mid-September, and analysts at RBC have gone so far as to tip Burberry as one of their top picks for luxury in 2025 – an unlikely and impressive turn of events given where the brand was just a few months ago.