- Billionaire’s empire-building continues
- Frasers becomes ASOS’ fourth biggest shareholder
- Hugo Boss holding has increased
Mike Ashley-controlled retail conglomerate Frasers (FRAS) has become the fourth biggest shareholder in struggling online fast fashion seller ASOS (ASC) and increased its investment in Hugo Boss (BOSS:ETR), moves which demonstrate retail kingpin Ashley is not done with the sector just yet.
Shares in sportswear-to-luxury brands purveyor Frasers, which has hoovered up a slew of UK retailers in recent years, firmed 0.6% to 625p on the stake-building news.
WHY HAS ASHLEY TAKEN AN INTEREST IN ASOS?
Sports Direct-to-House of Fraser-owner Frasers has emerged as a 5.1% shareholder in ASOS just days after the troubled online fashion retailer’s new CEO Jose Antonio Ramos Calamonte outlined his turnaround plan as ASOS reported slowing sales and a lurch into full year pre-tax losses.
Frasers’ stake in Topshop-owner ASOS, whose shares ticked up 1.8% to 519p on the news, won’t give it any control over the business or a position on the board, though Frasers may look to use its stake to build a partnership with the fallen online fashion purveyor.
As AJ Bell financial analyst Danni Hewson pointed out: ‘ASOS’ financial results revealed some significant problems for the business as spending by its core demographic dries up and the company faces rising costs and a more perilous balance sheet position, but Ashley clearly believes there is still value in the brand.’
HOW MUCH OF HUGO BOSS DOES FRASERS OWN?
Frasers now owns 4.3% of German fashion brand Hugo Boss shares directly and holds a further 28.5% through financial instruments known as put options, giving it a 32.8% interest in the apparel, watches and eyewear seller worth almost €1 billion without having to make a takeover bid.
‘Frasers Group has a long history (over twenty years) of making strategic investments to develop relationships and partnerships with other retailers, suppliers and brands, including by way of acquisitions of shares, options, contracts for difference and other financial instruments,’ explained the Shirebrook-based company.
‘The strategic investments Frasers makes offer new opportunities for the company, whilst also helping to support the long-term future of the existing retail businesses, and the many thousands of jobs they sustain.’
Furthermore, Frasers explained it has ‘extensive ambitions’ to grow the business inside and outside of the UK and is ‘constantly exploring the potential for further expansion’.
Ashley recently stepped down as Frasers’ CEO, handing the baton to son-in-law Michael Murray, though he remains the controlling shareholder of a conglomerate that owns everything from Sports Direct and House of Fraser to Flannels, Jack Wills, Game, Evans Cycles, Missguided and Studio Retail.
Frasers also has stakes in Mulberry (MUL:AIM) and N Brown (BWNG:AIM) and is seeking full ownership of Australian online retailer MySale (MYSL:AIM).
DISCLAIMER: Financial services company AJ Bell referenced in this article owns Shares magazine. The author of this article (James Crux) and the editor (Ian Conway) own shares in AJ Bell.
