Frasers Is Now Boohoo’s Biggest Shareholder
Frasers Group, already the largest Boohoo shareholder, continues with more share purchases of both Boohoo and Asos, while value chain Primark pushes forward on its store expansion.
Frasers Group
When will Frasers Group owner Michael Ashley decide enough is enough? The billionaire retail guru has bought up even more shares in British fast-fashion e-tailers Boohoo and Asos.
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Frasers Group became Boohoo’s largest shareholder earlier this month when its stake grew to 13.4 percent. Now it holds more of the Manchester-based brand’s shares than even Boohoo founder and executive chairman, Mahmud Abdulla Kamani, who controls a 12.6 percent stake valued at 62 million pounds ($75.1 million), according to MarketScreener data.
Frasers’ regulatory filings show that the group’s Boohoo stake now stands at 16.5 percent, up from 15.1 percent two weeks ago. The latest investment in Boohoo, the fourth such move in about eight weeks, is valued at 74 million pounds ($90.8 million). Rounding out Boohoo’s top three stakeholders is Norges Bank Investment Management, which has a 6.5 percent position valued at 32 million pounds ($38.8 million).
Frasers also upped its stake in e-tail competitor Asos, holding nearly a 12.6 percent stake from 10.7 percent two weeks ago. Ashley is the “controlling” stakeholder on behalf of Frasers in both instances. The Frasers stake is valued at 59 million pounds ($71.5 million), according to MarketScreener. Frasers first started investing in Boohoo in June. At the time, it had already owned a position in Asos from last year.
Frasers still has a long way to go before catching up to Asos’ largest stakeholder Aktieselskabet AF 5/5/2010, a wholly-owned subsidiary of Danish fashion group Bestseller. Bestseller holds a 27.1 percent stake valued at 152 million pounds ($184.1 million). Holding the second largest stake in Asos at 14.0 percent that’s valued at 78 million pounds ($94.5 million) is Camelot Capital Partners. Camelot is also the fourth largest Boohoo shareholder at 5.1 percent, currently valued at 25 million ($30.3 million).
Why Frasers continues snapping up stakes in these two companies remains a mystery. The company does own a so-called “strategic investment” in other firms as well, such as Mulberry, N Brown, Currys and Hugo Boss. Ashley’s reputation as a wheeler-dealer in the acquisitions world raises questions about his stakes in the digital fast-fashion space, such as whether a future takeover is in the cards.
But Ashley might be wheeling and dealing a different kind of game these days. With Michael Murray leading day-to-day operations as Frasers CEO since May 2022, Ashley seems to be spending more time focusing on the retail conglomerate’s investment stakes. And Frasers may have already spilled the beans on its future plans, at least for Boohoo.
Frasers in June cited the Kourtney Kardashian collaborator’s popularity with young women as a factor behind the financial move in digital fast fashion. It noted that Boohoo offers “synergies” with other brands Frasers already owns, namely Missguided and I Saw It First. Frasers cited an “opportunity to strengthen our own brand proposition in collaboration with Boohoo.” Ashley’s significant stake in Boohoo gives him the firepower to push on merchandising deals that can help both the e-tailer and Frasers’ brands. The same could be said for the struggling Asos, which has delayed its earnings report by one week.
More recently, Frasers is awaiting German regulatory approval so it can move forward on its planned acquisition of SportScheck, which its expects to close in the first quarter of 2024. The German chain, focused on sports retail, operates 34 stores in prime city locations in the country. Murray said last week that the deal is part of Frasers’ journey to become the No. 1 sports retailer in the EMEA (Europe, Middle East and Africa) region.
Frasers roots are centered in Sports Direct, a sporting goods retailer. It was Sports Direct that acquired the House of Fraser department stores chain out of bankruptcy in August 2018 for 90 million pounds ($115 million).
Primark store plans
Primark took a few more steps in its grand plan to run 60 U.S. stores over the next five years.
The Irish value fashion chain opened three New York area stores in Brooklyn’s City Point, Roosevelt Field in Garden City, Long Island; and Crossgates Mall in Albany. A Jamaica Avenue store in Queens and a Green Acres location in Nassau County are on deck to launch next year. Earlier this year, Primark signed a new store lease in Tysons Corner, a Virginia suburb outside of Washington, D.C.
Primark opened its first U.S. store six years ago in Boston, and last month opened its 13th U.S. store in Philadelphia’s Fashion District.
Primark, owned by Associated British Foods (ABF), last month launched its fashion collaboration with British “You Only Love Me” singer and songwriter Rita Ora.
ABF is set to report annual earnings on Nov. 7. For the third quarter ended May 27, “higher average selling prices” helped Primark sales improve 13 percent to 2 billion pounds ($2.54 billion). Primark raised prices last year to offset higher operating costs.
