Frasers Group acquires stake in Boohoo

Frasers Group has purchased a 5% stake in fashion giant Boohoo.

The owner of Flannels, Sports Direct and House of Fraser has become one of the largest single shareholders in Boohoo Group. Co-founder Mahmud Kamani remains the largest shareholder.

The news coincides with Frasers Group's investment in Currys, purchasing a 8.9% stake in the electrical goods retailer.

It also follows a number of recent business moves by Frasers Group. Last week, the group increased its stake in ASOS to 10.6% and purchased a 18.9% stake in online electrical retailer AO World.

The business also acquired a variety of "non-core UK fashion brands" from JD Sports earlier this year. Prior to this, Frasers Group purchased Gieves & Hawkes, Australian luxury footwear brand Sneakerboy, and fast fashion brands I Saw It First and Missguided.

In a statement, Frasers Group said: "Driving growth through strategic investments is a core part of Frasers' DNA.

"Under Michael Murray's leadership, we continue to build on our long track record of establishing supportive shareholder positions in attractive retail companies. We have a clear strategy to identify opportunities to invest in businesses which complement our existing sport, premium and luxury businesses, or help us to build and further utilise our sector-leading ecosystem.

"Boohoo is an attractive proposition to us with its laser focus on young female consumers. 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."

Last month, Boohoo Group reported a £90.7 million pre-tax loss for the year to 28 February 2023, with sales down 11% to £1.77 billion. However, the company said it expected a rebound in performance this year.

Boohoo is currently facing shareholder backlash at its annual general meeting as advisory firms oppose executive bonuses, due to losses of over £90 million.

Institutional Shareholder Services has urged investors to oppose the pay report on Thursday for the year ending February 2023. This comes after the remuneration committee decided to increase bonuses.