Frasers Group, the retail conglomerate behind Sports Direct and Flannels, has scaled back its stake in Burberry to six per cent, according to latest filings, even as it intensifies its push into luxury fashion.
The company had built its position in the FTSE 100 fashion house to 7.4 per cent as recently as last week, with the stake maintained through put options that give Frasers the right to sell shares at a predetermined price.
Investment value and recent history
Burberry is valued at more than £3.8bn, meaning Frasers Group's investment remains worth approximately £240m. Mike Ashley's company initially acquired a 4.2 per cent stake in the group in July, as reported by City AM.
The British fashion brand is undergoing a transformation under chief executive Joshua Schulman, who is repositioning the company in the mid-market following a brief venture into ultra-high fashion. Burberry has shed thousands of jobs in recent years but reported a five per cent rise in revenue in the three months to July.
Luxury portfolio expansion
Ashley's interest in Burberry has been part of broader efforts to elevate his fashion portfolio upmarket. These efforts have been endorsed by Schulman, who praised Flannels for "bring[ing] the energy of a fashion capital to key regional cities, giving more customers the opportunity to buy a Burberry trench coat in their home town".
Earlier this year, Frasers Group acquired luxury department store chain Harvey Nichols out of administration for £40m, announcing plans to use the purchase to expand its Flannels brand.
Hugo Boss stake grows
The retail giant has also amassed a stake of approximately 48 per cent in German fashion house Hugo Boss, with shareholders told that majority control remains firmly in its ambitions. Last month, Frasers chief executive Michael Murray, Ashley's son-in-law, was appointed chairman of Hugo Boss' supervisory board, following the departure of its previous incumbent owing to "recent changes in the company's shareholder structure".
Over the summer, Frasers had been steadily consolidating its position in Hugo Boss, aggressively acquiring shares directly from shareholders after the group rebuffed its "inadequate" takeover proposal.
