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Frasers Shares Rise After Retailer Lifts Hugo Boss Exposure, Builds ASOS Stake

Published 10/24/2022, 09:50 PM
© Reuters.

By Scott Kanowsky

Investing.com -- Shares in Sports Direct owner Frasers Group (LON:FRAS) rose on Monday after the U.K. sportswear firm announced that it had increased its maximum exposure to fashion chain Hugo Boss AG (ETR:BOSSn) and purchased a stake in British online retailer ASOS (LON:ASOS).

Frasers said it had built a 4.3% direct interest in Hugo Boss, as well as 28.5% in share capital through the sale of financial derivative instruments known as put options. These allow the buyer of the contract to sell shares at a predetermined price in the future.

After accounting for the premium Frasers will receive for the options, the company's maximum aggregate exposure to Hugo Boss is worth approximately 960M euros based on the value of the German firm's closing share price on Friday.

Frasers first started to acquire shares and derivatives in Hugo Boss - a big supplier to its Flannels luxury brand - in 2020.

In a statement, Frasers said it has "extensive ambitions" to grow the business outside of Britain and is constantly looking for options for potential expansion.

"Accordingly, Frasers Group's board of directors believe that the acquisition of direct and/or indirect strategic stakes within Hugo Boss, are in the ordinary course of business of the Company," it said.

Meanwhile, Frasers - originally founded by billionaire Mike Ashley - also unveiled a 5.1% holding in ASOS, according to a regulatory filing. The move comes as the digital retailer, which saw a surge in demand during the pandemic, has struggled following the lifting of COVID-era restrictions.

Frasers previously acquired ASOS rival Missguided and Studio Retail Limited out of administration in a bid to enhance its online offerings.

Shares in Hugo Boss edged up by more than 1%, while ASOS shares were slightly higher in mid-afternoon trading.

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