Mike Ashley’s Frasers Group has bought a 5 percent stake in British fast fashion giant Boohoo, making it one of its major shareholders.
In an announcement to the stock market Tuesday, Frasers Group described Boohoo as “an attractive proposition to us with its laser focus on young female consumers”.
It continued: “We see potential synergies and an opportunity to strengthen our own brand proposition in collaboration with Boohoo, most obviously with Frasers Group brands I Saw It First and Missguided.”
Rivals Frasers Group and Boohoo have been rapidly snapping up smaller or struggling businesses in recent years as they expand their vast retail empires.
Frases Group, which owns brands Sports Direct, House of Fraser, and Jack Wills, among others, reached an agreement in December to buy 15 brands from sportswear giant JD in a deal worth 47.5 million pounds.
It also this year acquired Missguided, Studio Retail, and I Saw It First, and has snapped up stakes in the likes of Hugo Boss, Mulberry, and N Brown.
Acquisition spree continues at Frasers
Earlier this month, the group announced it had upped its stake in struggling fashion e-tailer Asos to almost 9 percent amid speculation of a potential takeover bid.
That news came just days after Frasers Group confirmed it was planning job cuts following a report by The Sun claiming as many as 200 jobs could be axed, citing sources from the group.
In a statement, Frasers said it was “reviewing our team structures to identify efficiencies and streamline processes, and we have entered a consultation period with colleagues affected by these changes”.
As well as the Boohoo news, Frasers Group announced Tuesday it has bought a 9 percent stake in electrical giant Currys, the second such acquisition after announcing last week it had bought shares in electrical retailer AO.
It said the stake in Currys “provides us with a valuable opportunity to build on our foothold in the electricals industry as well as deepening the existing relationship between Currys and Studio, with the potential for further collaboration between the two”.
Frasers explores retail outside of fashion
It said Currys will also benefit from “Frasers' deep retail know-how and our sector-leading ecosystem”.
The group also announced last week that Greg Pateras, the CEO of Frasers Group Fashion, would be leaving the business.
Manchester-based Boohoo has also experienced some eventful months recently. The company is currently facing an investor revolt over planned executive bonuses.
The retailer, which reported sky-rocketing sales and profits during the pandemic as shoppers swarmed to online channels amid lockdowns, has been hit recently by dropping demand.
The company last month reported a pre-tax loss of 90.7 million pounds in the year to February 28, citing elevated operating costs and surplus inventory. That came as its sales fell 11 percent to 1.77 billion pounds.
The company has also seen its share price fall in recent years due to reports of poor working conditions at some of its suppliers in the UK.
In 2020, the company launched an independent investigation into its supply chain, which found “many failings”, and which led it to cut ties with hundreds of suppliers.