Mike Ashley’s Frasers Group became the fourth-largest shareholder in online fashion retailer Asos over the weekend after building up a stake of more than 5% in the company.
According to the Telegraph, Frasers has raised its stake in Asos just days after the retailer revealed an emergency cost-cutting plan and a pre-tax loss of £32.0m.
Asos benefitted greatly from the Covid-19 pandemic-fuelled online shopping boom. However, its valuation has collapsed from more than £5.0bn in March 2021 to little more than £500.0m on Friday, meaning Frasers was able to acquire its stake for approximately 10% of what it would have cost just 18 months earlier.
While Frasers has now become one of the biggest shareholders in Asos, ahead of Schroders, it still lags far behind top investor Danish billionaire Anders Holch Povlsen’s 26%.
Frasers’ purchase of one of the most shorted stocks on the London market both marks a continuation of the Sports Direct and House of Fraser owner’s empire-building efforts and also further intensifies the FTSE 100-listed firm’s rivalry with Boohoo.
As of 0805 BST, Frasers shares were up 1.69% at 631.50p and Asos shares were down 0.27% at 508.64p.
Reporting by Iain Gilbert at Sharecast.com
