Frasers Group hikes Hugo Boss stake after luxury brand warns on demand
Mike Ashley’s retail conglomerate now owns about 13.9% of Hugo Boss, worth £305 million.
Frasers Group has raised its stake in Hugo Boss after a fall in the German fashion brand’s share price since the start of the year.
Mike Ashley’s retail conglomerate now owns 2.47% of Hugo Boss shares, or 13.9% via the sale of put options.
In a stock exchange announcement, the London-listed firm said the investment brings its total share in the company to £305 million.
Of course, there’s no guarantee a buyout is the endgame, but it’s something the market will be watching with keen interest
Frasers Group had previously cut its large holding in the company at the start of 2023, bringing its share from £770 million to £580 million.
Hugo Boss’s share price has fallen significantly since then, with Frasers Group slowly selling its stake.
Frasers, which owns Sports Direct, House of Fraser and Flannels, holds investments in a number of retail names across Europe.
Hugo Boss’s share price fell more than 13% in a single day’s trading last month, after it warned of weak luxury demand in China and poor consumer confidence in the US.
Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown, said: “Sports Direct owner, Frasers Group, has increased its stake in Hugo Boss once more, taking the total exposure to almost 14% of the fashion retailer’s market share.
“There are inevitably questions surrounding the motivations for this, especially considering Frasers Group already has an eclectic mix of retailers under its roof.
“Should a takeover offer be brewing, Frasers’ investors will want to see an iron-clad plan for these assets, which is the element that’s been sorely missed from previous acquisitions.
“Of course, there’s no guarantee a buyout is the endgame, but it’s something the market will be watching with keen interest.”