Retailers Asos and Hugo Boss are among those seeing investment from Frasers Group this week, as the group follows a longstanding strategy of investing in other retailers and brands.
The company, previously Sports Direct, has previously bought a wide range of other brands and retailers – from House of Fraser to Evans Cycles, Game and Jack Wills – often out of administration, although it also took a stake Many of the brands it buys are subsequently stocked in its stores, where its focus is on an ‘elevation strategy’ that is designed to take the business upmarket.
Frasers Group says today, as it increases its stake in Hugo Boss to 4.3% held directly, plus 28.5% via put options, that its strategic investments “offer new opportunities” to the companies that it invests in while also “helping to support the long-term future of the existing retail businesses and the many thousands of jobs they sustain”. Earlier this month it also reported a 4.5% stake in the N Brown Group, which owns brands including Simply Be, JD Williams and Jacamo, and it is currently looking to take control of Mysale.
Frasers Group statement today adds: “Frasers Group continues to see opportunities that strengthen Frasers Group’s brand proposition and the recent acquisitions of Studio Retail Limited (with its significant knowledge and experience in consumer credit) and Missguided (with its focus on womenswear and its digital platforms) are examples of its drive to expand and acquire businesses and brands that can strengthen Frasers Group, and the connection to our consumers.”
At the same time, Asos announced that Frasers Group has taken a 5.1% stake in its business, days after the fast fashion pureplay reported an 89% fall in profits. Asos owns brands including Topshop and Topman, which it bought from out of administration following the failure of the Arcadia Group, previously run by Phiiip Green.
Commenting, Andrew Busby, retail industry lead at Software AG, says: “With the news last week that Asos had slumped to a near £32m loss and its share price had tanked by over 80% in the year to date, it was almost inevitable that we would see interest for further afield. And there’s none more acquisitive than Frasers. For those of us who witnessed his steady rate of acquiring a larger and larger stake in the then-struggling Debenhams, this latest move on Asos is very much a case of déjà vu.
“With Frasers Group increasing its stake to over 5% in Asos, it becomes the fourth largest shareholder – and whenever Ashley acquires a significant stake he rarely lets go of his prey. Frasers has big ambitions through its elevation programme spearheaded by new CEO and Ashley’s son, Michael and ASOS seem like a good fit. And as an added bonus it wouldn’t have escaped Ashley that he would be acquiring (albeit indirectly) Topshop and Topman from his once arch-rival on the high street, Philip Green.”