Frasers Group Ups Stake in Hugo Boss

Frasers Group (LON: FRAS) said Friday that it has increased its stake in fashion giant Hugo Boss.

In January 2020, Mike Ashley's Frasers Group took a 5.1% stake in the company through stocks and derivatives, saying at the time that it intended to be a “supportive stakeholder and create value in the interests of both Frasers Group's and Hugo Boss' shareholders.”

However, it reduced that stake in January 2023 after the Hugo Boss share price enjoyed a run higher. Since July 2023, Hugo Boss shares have declined, falling more than 25% over the last 12 months.

Now Frasers Group said it has recently increased its investment in Hugo Boss, taking its total share in the company to £305m.

The Sports Direct owner revealed it now holds 2.47% of the company’s shares, or 13.92% when accounting for shares via the sale of put options.

“Frasers Group's maximum aggregate exposure in connection with its net acquired interests in Hugo Boss, with the common stock holding valued at the closing share price on 29 May 2024, is approximately €360m (c. £305m),” Frasers said in a release this morning.

In April, Hugo Boss was downgraded to Neutral from Buy at UBS, with a price target of EUR 57, down from EUR 82.

The bank told investors in a note that Hugo Boss won't be immune to increased industry headwinds, including weaker consumer sentiment and a highly promotional environment.