Frasers Group raises stake in ASOS

Frasers Group has raised its stake in ASOS to nearly 9% ahead of a potential battle for control of the online retailer.

The owner of Sports Direct and Flannels has increased its stake from 7.4% to 8.8%. This is up from 5.1% last October.

Mike Ashley’s retail empire, which is now run by his son in law Michael Murray, is now the third largest shareholder in ASOS behind Danish billionaire and Bestseller owner Anders Holch Povlsen and Camelot Capital Partners.

The move follows recent interest from Turkish fast fashion retailer Trendyol as it considers a £1 billion bid for ASOS.

According to The Sunday Times, Trendyol made an approach to ASOS in December with a potential offer that would have valued the business at between £10 and £12 a share.

This emerged shortly after ASOS raised £75 million from a share placement and secured a new long-term £275 million financing facility, replacing a previous arrangement that was due to expire next year, to fund its turnaround programmed, called 'Driving Change'.

Led by CEO José Antonio Ramos Calamonte, the new agenda shifts the focus of ASOS from short-term top-line growth to long-term profitability.

ASOS revealed sales dropped 7% to £1.84 billion in the six months to 28 February 2023, whilst pre-tax losses widened to £290.9 million (2022: £15. 9 million).

The loss was in large part down to a write-off of £128.2 million worth of stock and £49.4 million of non-cash property impairments due to closure costs relating to the reduction is size of its HQ and logistics footprint.

The news comes after a number of business moves by Frasers Group over the last year. Earlier this year, Frasers acquired a variety of "non-core UK fashion brands", including Giulio, Tessuti and Cricket, from JD Sports. Prior to this, the group purchased Gieves & Hawkes, Australian luxury footwear brand Sneakerboy, and fast fashion brands I Saw It First and Missguided.