Frasers Group’s Boohoo stake rises again

Frasers Group tends not to shout too loudly about its purchases of shares in various companies and so it is with its stake-building in Boohoo Group.

But on Friday a stock exchange filing came through showing that it now has over a 13% holding in the business.

Its holding has risen to 13.43% from 10.42%, which is perhaps unsurprising given that the Boohoo share price is currently slumbering at around 30p, having fallen this week following its latest set of results.

So what can we read into this? Well, for a start, Frasers – or more specifically, the man who controls most of the shares in the company, Mike Ashley – clearly sees value in Boohoo. But that value might be different from that seen by, say, an ordinary shareholder who might be looking to see their share price rise over the years.

Ashley is well known as someone who likes to scoop up businesses at cheap prices, and also as someone who likes to buy businesses that are complementary to those his group already owns.

It’s unclear whether he has ambitions to mount a larger assault on the company’s shares, although in the past Frasers has denied such an intention. 

The retail giant has previously said that its stake in Boohoo is in line with its strategy of building “supportive” positions in “attractive” companies.

And that makes sense as well given that the company has been happy to hold substantial stakes in businesses such as Hugo, Boss and Mulberry without any takeover attempts.