Frasers Group ups Hugo Boss holding, ASOS 5% buy unlikely to mean a full bid

By

Sandra Halliday

Published
Oct 24, 2022

Ever-acquisitive Frasers Group announced on Monday that it has increased its investment in Hugo Boss, and now has a combined holding of 32.8% of its shares.

That’s divided into a 4.3% direct holding of its common stock and 28.5% via the sale of ‘put options’.

That means it now controls shares of the German fashion giant worth approximately €960 million/£840 million.

There’s no hint of its ever trying to buy the company outright and it said it has over a 20-year history 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

“The strategic investments Frasers Group 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”.

The news comes just a day after press reports that Frasers had built a 5% stake in ASOS, although as the markets opened on Monday, neither Frasers nor ASOS confirmed that. ASOS later said that Frasers now had a 5.1% holding.

Frasers told ASOS on Friday that it was now one of its most significant shareholders, in fact being fourth on the list of the largest holders of its stock.

The company already had a stake in the business but has increased it after ASOS shares have fallen nearly 20% in the last month. 

Yet with ASOS’s market value still more than half a billion pounds, it’s unlikely to be thinking of making a full bid for the firm. The business certainly doesn’t fit into the bargain bucket category that often appeals to Frasers.

Frasers, which itself has a market value of over £3 billion, is currently trying to buy all the shares of MySale, which has a market value of only £23 million. And it has also recently bought control of Studio Retail and Missguided at bargain prices.

As mentioned, Frasers is far from being the biggest shareholder of ASOS with the family that controls Bestseller being the top name on the list with a 26%+ holding.

Frasers is often drawn to a company by its bargain share price, whether it’s opting for an outright buy or simply wants to be a strategic investor.

Hugo Boss shares, for instance, are well down from their 2015 high of over €117 at less than €47 today. And ASOS’s share price plunging by over 80% in a year certainly makes its such a business. 

But Frasers clearly believes the pureplay e-tailer has the capacity to bounce back from its current problems.

Neither Frasers nor ASOS have yet confirmed the holding, as mentioned. But in its statement about the Hugo Boss stake, Frasers said the 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.

“Frasers Group has extensive ambitions to grow the business inside and outside of the UK and is constantly exploring the potential for further expansion.”