Frasers Group raises Boohoo stake again

Frasers Group has upped its stake in Boohoo once again as it continues to build on its investment into the fashion retailer.

The owner of the Sports Direct and Flannels increased its shareholding in Boohoo to 16.5% from 15.1% previously, with the group now owning 209.3 million shares, according to filings.

Earlier this month, Frasers leapfrogged the co-founder of Boohoo – Mahmud Kamani – to become the largest single shareholder in the company.

Frasers first snapped up a stake in Boohoo in June, initially taking a 5% holding, saying at the time that it saw "potential synergies" between Boohoo and two of its brands, I Saw It First and Missguided, and hoped it would lead to collaborations.

Previously, Kamani was the biggest individual shareholder in Boohoo, with a 12.9% stake, while he held an aggregate stake, together with his co-founder, Carol Kane, of 25%.

The stake-building in Boohoo comes as the online retailer has suffered hefty share price falls – down 43% over the past six months – as sales have suffered amid the cost-of-living crisis and a turnaround plan.

Boohoo warned earlier this month that full-year sales could tumble by up to 17% as under-pressure shoppers cut back.

It blamed a slower-than-expected recovery in sales by volume and moves to focus on more profitable sales within its labels as part of overhaul plans.

Boohoo revealed that underlying earnings may now fall in the year to 28 February, lowering its guidance to between £58 million and £70 million.

It is cutting prices to attract cash-strapped consumers during the cost-of-living crisis, while axing costs under an overhaul.

Boohoo is just one of a raft of rival retailers that Frasers has been snapping up stakes in as it expands its empire.

It revealed in June that it had built up an 8.9% stake in electrical retailer Currys, adding to its holding in online electrical firm AO World, while recently increasing its holding in ASOS to over 20%.

The group, majority owned by former Newcastle United boss Ashley, said earlier this year that investments are "a core part" of the company’s DNA.