Mike Ashley’s Frasers Group has acquired a 5% stake in British fast fashion giant Boohoo. Frasers is now one of the company’s major shareholders.
On Tuesday, Frasers Group described Boohoo in a stock release as “an attractive proposition for us with its focus on young female customers”.
“We see potential synergies and an opportunity to strengthen our own brand offering in collaboration with Boohoo, particularly with Frasers Group’s I Saw It First and Missguided brands,” the company said
Competitors Frasers Group and Boohoo have been buying up smaller or struggling companies to expand their massive retail empires over the past few years.
The Frases Group, which owns brands such as Sports Direct, House of Fraser and Jack Wills, reached an agreement in December to buy 15 brands from sportswear giant JD in a deal worth £47.5m (about €55.47m). . That year, the company also acquired Missguided, Studio Retail and I Saw It First, and took stakes in brands like Hugo Boss, Mulberry and N Brown.
Wave of acquisitions at Frasers continues
Earlier this month, the group announced that it had increased its stake in struggling online fashion retailer Asos to almost 9 percent amid speculation about a possible takeover bid. The news came just days after the Frasers Group confirmed a report by UK newspaper The Sun that up to 200 jobs could be cut.
In a statement, Frasers said it was “reviewing the structure of teams to increase efficiency and streamline processes, and will be consulting with colleagues impacted by these changes.”
Alongside the latest Boohoo news, the Frasers Group also announced on Tuesday that it has acquired a 9% stake in electronics giant Currys. This is the second such acquisition within a few weeks of buying shares in electronics retailer AO.
Frasers opens up retail outside of the fashion industry
Investing in Currys “provides a valuable opportunity to establish oneself in the electronics industry and to deepen the existing relationship between Currys and the studio.” Currys will also benefit from Frasers’ deep retail expertise and industry-leading ecosystem, the company said.
The group announced last week that Greg Pateras, the CEO of Frasers Group Fashion, will be leaving the company.
Manchester-based company Boohoo has also had a busy few months recently. The company is currently facing an uprising from shareholders over planned bonus payments for executives.
The company, which has seen sales and profits soar during the pandemic as shoppers turned to online stores during the lockdown, has struggled with falling demand of late.
Last month the company reported a pre-tax loss of £90.7 million for the year ended February 28, citing increased operating costs and excess inventories. The company’s turnover fell by eleven percent to 1.77 billion British pounds.
The company’s share price has also fallen in recent years on reports of poor working conditions at some of its UK suppliers. In 2020, the company launched an independent investigation into its supply chain, which found “numerous deficiencies”. This resulted in severing relationships with hundreds of suppliers.
This translated post previously appeared on FashionUnited.uk.