For the second time this week, Frasers Group increased its stake in ASOS, and as a result, it now owns slightly under 10 per cent of the company’s stock.
The retail company, which also owns House of Fraser, Flannels, Sports Direct, USC, and other brands, disclosed on June 6 that it had increased its stake to 8.8 per cent and that it has further increased it on 8th June to 9.9 per cent.
Frasers’ additional investment in ASOS stock comes after weekend reports that Trendyol, a Turkish fast-fashion retailer backed by China’s Alibaba, was considering a £ 1 billion takeover approach for ASOS. A proposal for the deal, which would value ASOS shares at between £ 10 and £ 12 each, was made before Christmas. However, there were no active negotiations taking place at the time.
Frasers had previously bought a 7.4 per cent stake in ASOS prior to this, and its ownership of the company was initially made public last autumn when it was stated it had purchased a stake worth more than 5 per cent.
It is well known that Frasers has what it refers to as ‘strategic stakes’ in other companies. Although it has stated it has no plans to make a bid, it presently owns more than 30 per cent of the luxury company Mulberry, which is already majority owned by Challice, the investment vehicle for Singapore’s Ong Family, which controls a share of almost 56 per cent.
In order to support its recovery strategy, known as ‘Driving Change,’ ASOS recently said that company had secured £ 75 million through a share placement. The online retailer also obtained a brand-new, US $ 275 million, long-term credit facility.
Pre-tax losses increased to £ 290.9 million as revenues fell 7 per cent to £ 1.84 billion in the six months leading up to 28th February 2023, according to ASOS’s interim results released last month.
The loss was primarily caused by the write-off of shares valued at £ 128.2 million and non-cash property impairment losses of £ 49.4 million resulting from closure expenses associated with the shrinking of the company’s headquarters and logistics footprint.
