Mike Ashley‘s Frasers Group is sending the message that “now is a good time to invest”.
Frasers Group, whose majority owner is Ashley, has again taken bigger stakes in both Boohoo and Asos.
Regulatory filings show that the company last Thursday raised its stake in Boohoo to 15.1 percent from its prior position of 13.4 percent. Frasers made its first “strategic investment” in Boohoo in June and raised it a month later to 6.8 percent from 5 percent. That increased to 10.4 percent in September. Although the CEO of Frasers is Michael Murray, Ashley is listed as the “ultimate controlling person” of the voting rights, according to the regulatory filings. Ashley stepped down from the CEO role in May 2022 and was succeeded by Murray.
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Frasers last Thursday also raised its stake in Asos to nearly 22.8 percent from its previous stake of nearly 19.7 percent. Frasers took an initial 5 percent stake in the fast-fashion e-tailer in October 2022. Ashley is also listed as the “ultimate controlling person” in the Asos filings.
As Frasers continues to acquire stakes in the fast-fashion e-tailers, the company disclosed Tuesday that it has inked a binding agreement with Signa Retail Department Store Holding GmbH to acquire SportScheck, a leading sports retailer in Germany.
Frasers said in a regulatory filing that the deal, expected to close in the first quarter of 2024 pending German regulatory clearance, will help it to grow its presence in Germany. The Mike Ashley majority-owned retail firm said Germany is one of the biggest sports markets in Europe. It noted that SportScheck has over 75 years of expertise in sports retail, and “34 stores in prime city locations across Germany” with revenue around 350 million euros ($371 million).
“Acquiring the leading sporting goods retailer in Germany is a big step in our journey to becoming the number one sports retailer in EMEA (Europe, Middle East and Africa)—and we are delighted to do this with the full support of major global brand partners, Adidas and Nike. Growing and expanding our Sports business is a key focus area in becoming an international retail business,” Murray said. “The German market represents a huge opportunity for us, and we look forward to bringing our experience, resources and relationships to strengthen the SportScheck business.”
Bjørn Gulden, CEO of Adidas AG, called that the acquisition of SportScheck “another big commitment in the sports industry” and a natural evolution of Frasers’ strategy to become a global player. “We are committed and excited to support Sports Direct on their journey,” Gulden said.
Meanwhile, questions continue to linger over whether Frasers might try to acquire enough shares in Boohoo and Asos to eventually attempt a takeover. The company’s official position is that it invests to be a “supportive stakeholder” in fashion firms. It’s done that before with Mulberry and Hugo Boss.
But Ashley has built a reputation for wheeling and dealing, and is best known for his specialty in distressed retail. Perhaps that acumen is helping Ashley to see things that others can’t yet. Or past experiences might mean Ashley is taking a different tactic in how he plans future acquisitions.
Recent financial reports from Boohoo and Asos suggest they’re struggling to right the ship. Fueling the fire is the fact that both fast fashion brands also offer “synergies” with the digital fast-fashion brands that Frasers already owns, namely Missguided and I Saw It First.
