Frasers acquires 5% stake in ASOS

Frasers Group has taken advantage of the slump in the share price of ASOS by snapping up a 5% stake in the online young fashion giant.

According to The Telegraph, Frasers notified ASOS on Friday evening that it had become a significant shareholder, just two days after ASOS had posted its annual results to 31 October 2022 revealing a near £32 million loss on sales up just 1% at £3.94 billion.

Shares in ASOS have been steadily dropping in value over the past year and, as a result, its market capitalisation has slumped from £5 billion in March of this year to just £500 million on Friday.

Frasers took advantage of the situation, buying its stake for a 10th of what it would have had to pay a year ago. It is now the fourth single biggest shareholder in ASOS behind Danish billionaire and Bestseller owner Anders Holch Povlsen (26%), Camelot Capital Partners (11%) and T Rowe Price (10%). Schroders holds just under 5% and is now the fifth largest shareholder behind Frasers.

Mike Ashley's Frasers likes to hold strategic stakes in other fashion brands and retailers. It held a near-30% stake in Debenhams before its demise and held a near 25% stake in French Connection before selling all of its shares in February 2021. 

The retail group, parent of Sports Direct, Jack Wills and House of Fraser, currently holds a more than 30% in luxury brand Mulberry, though it has said it has no plans to make a bid (Mulberry is already majority own by Challice, the investment vehicle for Singapore’s Ong Family, which owns around 56%).

Recently upped its stake in Hugo Boss and now owns more than 30% of its stock in the form of roughly 5% of its issued share capital and ‘put options’ representing another 26% of the company,

At the moment it is trying to encourage shareholders of Australia's fashion marketplace MySale Group to accept its bid for the business and has built up a near 60% stake in the London-listed business.

Earlier this year Frasers made a meaningful move into the fast fashion space acquiring online retailer Missguided out of administration for £20 million.

ASOS's new CEO José Antonio Ramos Calamonte outlined his plan to restore the fortunes of ASOS, which flew high during the pandemic but which has since been hit, like many in its sector, by falling demands, higher returns and supply chain pressures.