LONDON: Frasers Group Plc says it’s taken control of Hugo Boss AG, pushing its stake above 50% and turning the German apparel brand into a subsidiary of UK billionaire Mike Ashley’s retail empire.
With a fresh purchase of Boss shares, Frasers raised its holding to 50.08%, the British company said in a statement last Friday. Frasers previously held about 48% after an initial takeover bid fell short.
The UK company behind Sports Direct, Flannels and House of Fraser has built up its stake in Boss over the past few months and persisted in seeking a controlling position.
Last month, Frasers tightened its grip on Boss when chief executive officer Michael Murray, who is also Ashley’s son-in-law, was named chairman of the German firm.
Frasers has a reputation for building up positions in European retailers and then seeking change, and has steadily expanded its stake in Boss since first investing in the brand in 2020.
In June, Frasers launched a €38-a-share takeover offer, though Boss advised shareholders not to accept it, arguing the price undervalued the company.
The German firm also stopped a share buyback programme early, effectively removing one way Frasers could have boosted its stake beyond 50% without buying additional shares.
In the latest transaction, Frasers said it acquired 198,666 additional Boss shares at the previous offer price for a total of €7.63mil (US$8.6mil). Boss shares closed last Friday at €38.41, giving the company a market value of just over €2.6bil.
Boss earnings are expected to be consolidated into those of Frasers and the German retailer will become a subsidiary, the UK company said.
Boss, known for its pricey suits and underwear, is in the midst of a second turnaround plan under chief executive officer Daniel Grieder.
Frasers has been pushing more into luxury in recent years, taking stakes in British brands Mulberry and Burberry, and acquiring the storied department store chain Harvey Nichols out of administration in August.
Murray said in September that he saw “significant untapped potential” in Boss and said that his aim is to create “sustainable value for all shareholders and stakeholders”.
Boss supervisory board chairman Stephan Sturm departed during that month, after the UK company repeatedly questioned its support for him.
Furthermore, the increase in Frasers’ stake does not entail significant changes in terms of influence or with regard to day-to-day operations at Boss, a spokesperson for the German company said by phone.
Frasers declined to comment on its plans for the German brand beyond its statement. — Bloomberg
