Mike Ashley’s Frasers ups stake in Hugo Boss after takeover bid
Frasers Group has pushed up its stake in Hugo Boss to nearly half of the company, though Mike Ashley’s group misses out on full control of the luxury fashion brand.
The Sports Direct owner has increased its portion of the German fashion house to nearly 48 per cent after offering €38 for every share in the company it does not already own.
The FTSE 250 fashion group said on Tuesday it has bought 12,157,598 Hugo Boss shares from investors who agreed to sell up. That accounts for more than 17 per cent of the firm.
These extra shares are worth more than €463m (£396m), according to Hugo Boss’s €38.10 share price at Monday’s market close.
This means Frasers, which was already the fashion house’s biggest shareholder, now owns 47.89 per cent of the group, a stake worth more than €1bn.
Hugo Boss’s board had dismissed Frasers’s initial £1.7bn bid for the entire company as “inadequate,” urging shareholders not to accept Ashley’s offer.
Analysts had raised their eyebrows at the “modest” four per cent premium represented by Ashley’s offer. Shares in Hugo Boss jumped above the €38 mark immediately after Frasers tabled its bid in June.
But Ashley’s push for more control over Hugo Boss comes as part of a plan to tighten the grip of his fashion empire on the luxury sector.
Frasers makes up-market push
Last week, Frasers bought struggling department store chain Harvey Nichols out of administration for £40m.
The firm has fallen far from its 1990s heyday, in which its stores were synonymous with sitcom Absolutely Fabulous, but Frasers plans to integrate Harvey Nichols with its luxury Flannels brand.
Announcing the deal, Frasers chief executive Michael Murray said: “Harvey Nichols is an iconic British institution with significant potential, but it is clear meaningful change is needed.
“The turnaround will require tough choices, and we are prepared to make those decisions, even if that means a smaller business in the near term, to create a stronger and more sustainable Harvey Nichols for the long term.”
After Hugo Boss snubbed Frasers’s initial takeover play, the group had been plotting to install Murray, Ashley’s son-in-law, as the chief executive of the German firm.
The potential move, first reported by The Times, would mimic the group’s attempt to gain control of online retailer Boohoo. In 2024, Frasers unsuccessfully attempted to force Ashley onto the group’s board after building a 27 per cent stake in the firm.
Stephan Sturm, chairman of Hugo Boss’s supervisory board, said: “We appreciate Frasers Group’s continued long-term commitment to Hugo Boss and look forward to maintaining a constructive relationship with them as our single largest shareholder.”
The fashion group is in the midst of a turnaround plan and has posted falling profit and sales in recent months. “[We] welcome Frasers Group’s support for our long-term strategic direction,” Hugo Boss chief executive Daniel Grieder said.