Frasers Group, the retail conglomerate led by billionaire Mike Ashley, is aiming to acquire a majority ownership of German fashion retailer Hugo Boss. The company announced its intention to increase its shareholding in Hugo Boss to above 50% of the overall share capital and voting rights.
This move comes as Frasers Group also reviews its support for Stephan Sturm, the current chair of Hugo Boss's supervisory board. Frasers had previously opposed Sturm's leadership before reversing its stance in June, but is now reconsidering its position.
Frasers Group, which owns brands like Flannels and Sports Direct, has been steadily increasing its stake in Hugo Boss since its initial investment in 2020. The company disclosed that its shareholding reached 47.89% after recent acquisitions of additional shares. This increased ownership tightens Frasers' grip on the German retailer, following its recent acquisition of the department store chain Harvey Nichols.
In July, Frasers held approximately 36% of Hugo Boss, a threshold that triggered mandatory takeover bid rules under German law. At that time, Frasers offered £1.7 billion, or €38 per share, for the remaining shares. However, Hugo Boss's management and supervisory boards deemed the offer "inadequate from a financial point of view" and recommended shareholders reject it. Despite this, 17.6% of Hugo Boss investors accepted the €38 per share bid last month, bringing Frasers' stake to nearly 48%.
The company's strategy to expand its presence in the luxury market is exemplified by the recent £40 million rescue deal for Harvey Nichols, which had warned of imminent financial distress without new investment. This acquisition is part of Frasers' broader "elevation strategy," which aims to build on the growth of its Flannels brand. Michael Murray, Frasers' chief executive and Ashley's son-in-law, acknowledged that the Harvey Nichols integration would involve "tough choices" and a potential short-term reduction in business size.
Speculation has previously suggested Ashley's ambition to install Murray as the chief executive of Hugo Boss.