Mike Ashley’s Frasers Group has raised its stake in Hugo Boss to almost 48 per cent, intensifying its pursuit of the German fashion house only weeks after the company rejected a proposed takeover.
The move marks a significant escalation in Frasers’ strategy to build a larger position in premium and luxury retail. The group, which owns Sports Direct, House of Fraser and Flannels, had held about 36 per cent of Hugo Boss before making an offer last month to acquire the rest of the company.
Frasers offered about €1.98bn (£1.73bn) for the outstanding shares, valuing them at roughly €38 each. Hugo Boss’s management and supervisory board rejected the proposal, arguing that it was “inadequate from a financial point of view” and advising shareholders against accepting it.
Rather than retreat, Frasers has increased its ownership substantially, taking its holding close to the 50 per cent threshold that would give it significant additional influence over the company.
The move underlines how far Frasers has moved beyond its traditional sportswear retail base. The group has steadily accumulated shares in Hugo Boss since first investing in 2020, while chief executive Michael Murray sits on the German company’s supervisory board.
The latest investment also follows Frasers’ acquisition of Harvey Nichols, another high-profile step in its push into luxury retail.
Harvey Nichols was put up for auction after its accounts warned that the historic department store could cease trading within a year without fresh investment. Frasers’ rescue deal covers its six UK stores, online operations, inventory and about 1,000 employees.
The acquisition forms part of Frasers’ so-called “elevation strategy”, under which the group has sought to move further into premium retail and expand Flannels.
For Hugo Boss, Frasers’ decision to increase its stake after its approach was rejected raises the prospect of a prolonged contest over the German group’s ownership and strategic direction.
For Ashley, meanwhile, the calculation is increasingly clear: luxury fashion has become too important to Frasers’ ambitions to remain a minority investment.
Leave a Comment