Mike Ashley raises his stake in Hornby
MIKE Ashley has raised his stake in hornby as he continues to invest in struggling retailers.
The retail tycoon’s company Frasers Group, whose stable includes Sports Direct and house of Fraser, raised its holding in the Aim-listed model railway maker from 2.4pc to 8.9pc.
Ashley’s empire is the third largest shareholder in hornby, behind Artemis Investment Management and Phoenix Asset Management.
Hornby shares rocketed 31pc, or 6.5p, to 27.5p.
Ashley, 59, is known for buying up stakes in undervalued companies and has recently built-up significant holdings in AO World, Currys, Boohoo and Asos.
hornby enjoyed a boost during the pandemic when shoppers splashed out on lockdown fun.
But the group has suffered in the past year as momentum slows and it is faced with soaring costs and supply chain struggles.
Founded in 1901 by Liverpudlian businessman Frank hornby, the company is famed for its model train sets and also owns Scalextric, Corgi and Airfix. hornby’s models are already sold in Game stores, a subsidiary of Frasers. Chris Wootton, Frasers chief financial officer, said the firm wanted to explore opportunities for the two companies to work more closely together. But some analysts have said investors should not be pinning their hopes on a full-blown takeover yet.
‘Ashley’s style is to only acquire when something is on the verge of going bust as it prefers to pay pennies to buy something outright,’ said russ Mould at AJ Bell.
‘Instead, Frasers is more likely to seek strategic conversations about helping hornby to improve its distribution and logistics while at the same time realising it might be able to make a few quid by investing in its shares.’
Ashley’s push for hornby comes in the same week that he kicked off his £40m legal battle with investment bank Morgan Stanley in the high Court over its stake in fashion label hugo Boss.
The two- week trial centres around Morgan Stanley imposing an £800m ‘margin call’ on Frasers’ trading position in hugo Boss in May 2021. Frasers has accused the bank of making a ‘capricious’ and inappropriate move to force its business off the bank’s books in May 2021, having taken a ‘personal dislike’ to Ashley based on ‘class’.