Frasers Group raises stake in Hugo Boss

MIKE ASHLEY’S retail business Frasers Group has increased its investment in German fashion designer Hugo Boss.

Frasers Group, which owns chains such as Sports Direct and House of Fraser, now has 3.4m shares, corresponding to a 4.9pc stake in Hugo Boss. That is up from a 2.1pc stake in April. The current holding is worth around €900m (£776m).

Frasers Group also has put options over another 26pc of Hugo Boss shares, meaning it has the option to buy them at a specific price at a future date.

The investment “reflects Frasers Group’s belief in the Hugo Boss brand, strategy and management team,” the company said. Hugo Boss is in the process of shifting its lines towards more casual fashion.

Patrick O’brien, UK retail research director at Globaldata, said: “With Hugo Boss, the level of investment now is very significant, and it would appear that [Mr Ashley] must be at least considering the possibility of a takeover, though a move may not necessarily be imminent. In the meantime, he’ll be wanting to exert influence there in regards to securing its best moving lines ... Hugo Boss has wide appeal and is stocked across its USC, Frasers and Flannels stores, even though they have different target markets.”

Frasers first invested in Hugo Boss in 2020 and has been building up its holding since then. The company also owns a stake in British luxury handbag maker Mulberry. Frasers’ investment in highend brands has coincided with a push to make its shops more upmarket.

Mr Ashley is well known for his dealmaking. Frasers bought fast-fashion brand Missguided out of administration for £20m earlier this month and previously bought Jack Wills and House of Fraser after they collapsed.

Shares in Frasers Group rose by 0.7pc yesterday, while Hugo Boss climbed 0.4pc.