Frasers Group says it has "no intention" of bidding for Hugo Boss

Frasers Group has scotched speculation that it is intending to make a bid for luxury fashion house Hugo Boss, despite building up a sizeable stake in the business.

Mike Ashley's retail group was rumoured to be considering a bid which sent the Frankfurt-listed house's shares up by 6% earlier this month.

Frasers, which also owns House of Fraser, Sports Direct, Flannels, USC and Jack Wills among others, owns a 15.2% stake in Hugo Boss.

In June 2020 it declared it had taken a 5.1% stake before upping it to 10.1% within the same month. In January it upped its stake further to 15.2%.

When purchasing the shares in January, Frasers said its motivation was a reflection of the growing relationship between the two businesses, adding: “Frasers Group intends to be a supportive stakeholder and create value in the interests of both Frasers Group’s and Hugo Boss’ shareholders.”

It has now issued a one-line statement to the Stock Market to announce it "does not intend to bid for Hugo Boss AG".

Speculation has also been mounting that French luxury conglomerate LVMH, home of Louis Vuitton, Givenchy and Christian Dior, could also make a play for Hugo Boss. The chairman of the group, Bernard Arnault, has been snapping up shares worth €440m in recent months using investment vehicles controlled by himself and his family.

Frasers is known for taking strategic stakes in businesses, which does not necessarily mean an offer will be made. It also has a 36.8% stake in luxury house Mulberry. Ordinarily owning a stake over 30% in a listed business would result in a mandatory takeover bid, but Mulberry already has a majority shareholder in the investment vehicle for Singapore’s Ong Family, Challice, which owns 56%.

Fraser was obliged to clarify its intentions towards Mulberry last December and said that it did not intend to make a bid in the short-term.

Until recently it held a 25% in mid-market fashion chain French Connection but offloaded the shares in February.