Frasers Group Increases Hugo Boss Stake, Nears Takeover Threshold

Frasers Group, the retail company owned by billionaire Mike Ashley, has increased its stake in German fashion brand Hugo Boss to 30.28%, crossing the 30% threshold that requires a mandatory takeover bid under German law. The company announced it had purchased an additional 2.55 million shares, up from its previous holding of 26.06%.

Frasers Group's offer of €38 (£32.80) per share remains open for acceptance by Hugo Boss shareholders. The FTSE 250 firm, which owns brands including Sports Direct, House of Fraser, and Flannels, initially made its offer for Hugo Boss on June 10. This move signals Frasers' intent to potentially acquire the entirety of the German fashion group.

Hugo Boss has urged its shareholders to reject the bid, calling the offer 'inadequate' and suggesting it does not reflect the true value of the business. The fashion company's shares have experienced a significant decline from their peak in July 2023, attributed to weaker demand in key markets like Britain and China. Despite this, CEO Daniel Grieder is pursuing a turnaround plan, 'Claim 5 Touchdown,' aiming for growth through 2028.

Frasers Group stated that its increased stake in Hugo Boss underscores its long-term commitment to the brand, which it considers one of its top five brands within the group. The company has a history of acquiring stakes in struggling retailers, having previously bought several UK retailers out of administration.

This latest move comes as Frasers Group pursues a broader strategy of takeover bids, including a recent unsolicited offer for Australian footwear firm Accent. The group reported that its holdings in Hugo Boss and Accent contributed £50 million to its adjusted profit in the last fiscal year. For the year ending April, Frasers Group saw its revenue increase by 8% to £5.3 billion, with pre-tax profit growing by over a third to £528 million.