Mike Ashley's Frasers Group builds 5% stake in Asos

The sports and fashion group, which owns retailers including House of Fraser, Sports Direct and Flannels, told Asos on Friday (October 21) that it had become one of the company’s most significant shareholders.

Under City law, Frasers was required to inform Asos once its stake in the business reached 5% – a shareholding that establishes Ashley’s group as the fourth-largest investor in Asos. 

A formal announcement has not yet been made by Asos, although reports over the weekend had suggested it could arrive on Monday morning when the Stock Market reopened.  

Frasers initially took a stake in Asos earlier this year, but the group moved to increase its holding after Asos swung to a pre-tax loss of £32m in the year to August.  

Asos’ share price plunged more than 80% during the past year, having issued a profit warning and failing to continue the online trading momentum it carried through the Covid-19 pandemic. 

The etailer is also grappling with rising energy and staffing costs, the impact of the weak pound and a slowdown in fashion spending amid the cost-of-living crisis.

Asos said it would write off more than £100m of stock and seek to cut its costs as new boss José Antonio Ramos Calamonte seeks to transform the pureplay’s fortunes. 

Asos declined to comment on Frasers’ increased stake.

A Frasers spokeswoman said that the group “makes strategic investments in the ordinary course of its business, to develop relationships and partnerships with other retailers, suppliers and brands”.

Having already snapped up the likes of online players Studio, Missguided this year, Frasers is now leading the chase to buy Australian flash sales site MySale.

The group has amassed a shareholding of almost 60%, and has lodged a mandatory cash offer of 2p per share to take full control of the business.

Frasers said this morning that it now owns or has received valid acceptances in respect of 1.2 million MySale Shares, representing approximately 0.12% of the business.

In a separate filing to the Stock Exchange this morning, Ashley’s group said it had also increased its stake in Hugo Boss.

Frasers now owns 4.3% of Hugo Boss’ share capital, plus an additional 20 million shares of stock via the sale of put options, representing 28.5% of Hugo Boss’ share capital.

Frasers said: “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.

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

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