Frasers Group has urged Accent Group Chair Lawrence Myers to resign immediately “for the good of Accent and all its shareholders”, just three months after it launched a takeover bid for the company.
In an open letter to Myers, Frasers Group CFO Chris Wootton challenged Accent’s financial performance, governance, capital allocation and engagement with shareholders following the publication of its FY26 financial results.
Wootton said Myers’ position had become untenable after two earnings downgrades, a sharp decline in Accent’s share price and “broad-based shareholder dissatisfaction”, which he said was reflected in the rejection of the company’s FY25 remuneration report by approximately 82% of votes cast at last November’s annual general meeting.
Wootton noted that Accent’s share price had fallen by 52% over the past 12 months, which he said showed shareholder dissatisfaction. “Taking all of these factors into account, it is my opinion that you have failed on both performance and governance,” Wootton said in the letter.
Frasers, which is Accent’s largest shareholder, launched an unconditional A$0.65-per-share cash offer for the shares it did not already own on 15 June. It held approximately 22.9% of the company when the bid was announced.
The offer was extended in July and is scheduled to close at 4pm Sydney time on 30 September, unless Frasers extends or withdraws it.
A spokesman for Accent Group commented: “This is stunningly self-serving from a group trying to take control of the Company without paying a premium.”
Frasers challenged Accent’s FY26 performance
Frasers highlighted an A$48.6 million (£25.5 million) non-cash goodwill impairment, which the letter says “shareholders should find alarming”. Goodwill is the premium a company pays above the tangible value of a business it acquires and covers intangible assets such as brand and customer base. The write-down is an acknowledgement that those assets are now worth less than Accent’s balance sheet had previously claimed. Non-cash means no money left the business this year, meaning it is an accounting adjustment rather than a payment. In the letter, Frasers points out that Accent had previously “signalled risk” regarding its treatment of goodwill and that this had “now crystallised”.
After net borrowings increased by A$74 million (£38.9 million) during the year, Frasers also questioned Accent’s decision to recommend that shareholders receive a final dividend worth 1.25 cents per share.
The letter also highlighted that Accent’s inventory rose approximately 8% to A$334.8 million (£175.8 million), compared with 4.7% growth in owned sales. Over the same period, Accent also lowered its estimate of how much stock it expects to sell at a loss, from A$14.6 million (£7.7 million) to A$10.2 million (£5.4 million) – meaning a smaller share of the larger inventory stockpile is judged to be at risk. Wootton commented that a “larger inventory balance carried into a weaker, more promotional market, set against a smaller write-down provision, gives Frasers little confidence that this stock can be cleared without further discounting. In our view, this points to a real risk of continued gross margin pressure in FY27.”
Growth plan remains central to takeover dispute
Frasers also challenged the credibility of Accent’s 2030 Strategic Growth Plan, which aims for sales of at least A$1.9 billion (£998 million) and a 9% EBIT margin. The target is 1.8 percentage points higher than Accent’s FY26 underlying EBIT margin.
In the letter, Wootton highlighted his concern that Accent’s management team did not fully stand behind this ambition: “On the FY26 results call, when asked directly how that 9% target can be reconciled with an EBIT margin that went backwards this year, your own management pointed to currency and cost-out assumptions, then admitted that “that remains to be seen, but we’re doing our very best to make that happen.””
“You are asking the market to rely on a plan that your own management will not stand behind when questioned. That, in our view, is a serious accountability problem, one that goes directly to the governance failures set out in this letter,” Wootton added.
Accent’s Independent Board Committee previously recommended that shareholders reject Frasers’ bid, arguing that it failed to reflect the growth plan’s potential. The committee also highlighted that the offer contained no premium to Accent’s closing share price before the bid was announced.
Accent’s Australia and New Zealand network includes close to 900 stores, among them Platypus Shoes, and the company is Frasers’ regional partner for the Sports Direct rollout. Its growth plan also projects gross cost savings of around A$40 million (£21 million) through FY28 and a network of approximately 950 stores by 2030.
TheIndustry.fashion has contacted Accent for comment.