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Sports Direct owner Mike Ashley tightens hold on Hugo Boss

From The Guardian · () English

Summarized and contextualized by DistantNews.

At a glance

News Named sources Ongoing story
  • Mike Ashley's Frasers Group has increased its stake in luxury fashion brand Hugo Boss to 48%, falling just short of full control.
  • Frasers Group previously made a takeover offer of nearly €2 billion in June, which Hugo Boss's board rejected as inadequate.
  • Analysts suggest the increased stake is a significant step toward Ashley gaining control and increasing his influence over the German fashion house.

Retail billionaire Mike Ashley, through his Frasers Group, has significantly boosted his influence over luxury fashion giant Hugo Boss by increasing his shareholding to nearly half. The group now holds a 48% stake, a move that falls just short of outright control but solidifies Ashley's position as the largest shareholder.

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.

— Stephan SturmThe Hugo Boss chair commented on Frasers Group's increased stake and commitment to the company.

This latest acquisition follows a failed takeover bid earlier in the year. In June, Frasers Group offered nearly €2 billion for the German fashion house, an offer that Hugo Boss's board deemed "inadequate" and urged shareholders to reject. The current increase in stake is attributed to 17.6% of shareholders accepting Ashley's offer of €38 per share.

Analysts view this development as a major step towards Ashley potentially gaining control of Hugo Boss. Axel Rudolph, an analyst at IG, noted that the new shareholding puts Frasers "firmly in the driving seat" to increase its influence. Frasers Group has been an increasingly activist investor since first taking a stake in Hugo Boss in June 2020, aiming to drive changes within the company, which has faced challenges with declining women's clothing sales and sluggish demand in the Chinese market.

another major step towards gaining control of Hugo Boss.

— Axel RudolphAn analyst at IG commented on the significance of Frasers Group's increased shareholding.

Stephan Sturm, the chair of Hugo Boss, acknowledged Frasers Group's "continued long-term commitment" and expressed anticipation for a "constructive relationship." This move comes as Ashley continues to expand his luxury fashion portfolio, recently acquiring the Harvey Nichols department stores and holding a substantial stake in Mulberry. If Ashley eventually gains full control of Hugo Boss, it would add another prominent brand to Frasers Group's existing stable, which includes Sports Direct and Evans Cycles.

firmly in the driving seat as it looks to increase its influence

— Axel RudolphThe IG analyst further elaborated on Frasers Group's strengthened position.
DistantNews Editorial

Originally published by The Guardian. Summarized and contextualized by our editorial team with added local perspective. Read our editorial standards.

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