Sports Direct owner Mike Ashley tightens hold on Hugo Boss

Frasers Group, owner of Sports Direct, has increased its stake in Hugo Boss to 48%, bringing Mike Ashley close to control of the German fashion house. The move follows Frasers’ reported £40m purchase of the Harvey Nichols department-store chain last week. The increased holding reflects 17.6% of Hugo Boss shareholders accepting Frasers’ €38-a-share offer. The bid, made in June, represented a 4% premium to the share price at the time. Frasers’ nearly €2bn (£1.73bn) takeover offer was rejected by Hugo Boss’s board as “inadequate”, and shareholders were advised not to accept it. Axel Rudolph, an analyst at IG, described the latest purchase as “another major step towards gaining control”, putting Frasers “firmly in the driving seat” as it seeks greater influence. Frasers has stocked Hugo Boss products for years and has pursued an increasingly activist strategy since taking its initial stake in June 2020. Hugo Boss has faced weak women’s-clothing sales and sluggish demand in China. Chair Stephan Sturm said the company appreciated Frasers’ “continued long-term commitment” and looked forward to a constructive relationship with its single largest shareholder. Ashley has expanded his luxury interests through the Flannels chain and a large stake in British handbag maker Mulberry. He became Burberry’s fifth-largest shareholder last month after acquiring 4.2%, worth about £160m. The 170-year-old trenchcoat maker has struggled amid a global slowdown in luxury demand and announced 1,700 job cuts last year after reporting a £66m loss. Harvey Nichols, which has 13 stores and 1,200 employees, was bought out of administration after warning it could run out of money without new funding. If Ashley gains control of Hugo Boss, it would join Frasers’ businesses, including the Frasers department stores, formerly House of Fraser, Sports Direct and Evans Cycles. Ashley owns 73% of Frasers. He built the group from a single sports store in Maidenhead, Berkshire, opened in 1982 with £10,000 from his parents, and left its board in 2022. The Sunday Times rich list said his wealth rose £317m to £3.44bn last year. Analyst Nick Bubb called the Hugo Boss bid “surprisingly successful”. Ashley also launched a bid for Australian footwear company Accent Group this summer.