Mike Ashley’s Frasers Group has raised its stakes in both Boohoo Group and Asos for the third time this month.
The owner of Sports Direct, House of Fraser, Flannels and Jack Wills took its holding in Boohoo to 16.5 per cent from 15.1 per cent, a week after it had raised it from 13.4 per cent.
Frasers recently overtook Mahmud Kamani, Boohoo’s co-founder, who has 12.9 per cent, to become its largest individual shareholder. Kamani, 59, and his co-founder Carol Kane, 57, hold an aggregate stake of 25 per cent.
The FTSE 100 company also raised its holding in Asos from 10.7 per cent to 12.6 per cent, after buying shares in a series of moves.
Frasers has been incrementally lifting its stakes in Boohoo and Asos on a weekly basis. Some analysts have speculated that the group is betting on a revival in the fortunes of online retailers and is being “strategic” in its investments.
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Boohoo and Asos flourished during the pandemic, when shops were closed, but they have struggled since high streets reopened, hitting their stock market valuations. Shares in Boohoo have fallen by 19 per cent and those of Asos by 29 per cent in the year to date.
Asos said this week that it expected second-half adjusted earnings of more than £38 million. Previous forecasts had projected half-year earnings at the “lower end of the guided range of £40 million and £60 million”.
The downgrade came as Asos said it would announce its full-year results on November 1 to allow PwC, its auditor, to complete “planned testing”. The results had been due for release yesterday.
Analysts at Jefferies said: “While surprising that there appears to have been mild downward pressure on financial year 2023 numbers since the September fourth-quarter update, the real interest here is the reason for such a late delay. Perhaps it is nothing more than cautious auditors, but perhaps there is more to it — corporate activity, or concerns over trading or outlook.”
An Asos spokesman said there was no reason for the delay other than the audit not being completed on time.
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The retailer, originally known as As Seen On Screen, targets twentysomething shoppers. It said in a recent update that its active customer numbers had fallen by about 9 per cent to 23.3 million over the past year. It said this reflected a focus on improving the profitability of sales over the pursuit of growth at any cost. Order profitability grew by 35 per cent.
José Antonio Ramos Calamonte, 51, the chief executive of Asos, will host a strategy update alongside the results. Calamonte, who has led the business since June last year, has been working to reduce stock and has cut back on discounting.
Frasers, formerly called Sports Direct, said in June that its purchase of Boohoo shares was consistent with its strategy of building “supportive” positions in “attractive” companies. Ashley’s son-in-law Michael Murray, 34, the chief executive of Frasers, has said previously that he was driving the present round of share purchases and not Ashley, 59, himself.
Shares in Frasers declined by 4p, 0.5 per cent, to 790p. Those of Boohoo fell ¼p, or 1 per cent, to 30¼p, while Asos dropped 2p, or 0.5 per cent, to 394½p.
