- Frasers takes 28.7% stake in struggling fashion marketplace
- No financial terms disclosed
- Retail giant sees opportunity for winning strategic partnership
Mike Ashley-controlled Frasers (FRAS) has acquired a 28.7% stake in struggling Australia-based fashion marketplace MySale (MYSL:AIM) for an undisclosed sum.
Shares in Sports Direct-owner Frasers cheapened 1.3% to 663p on the news, with investors possibly regarding the stake as yet another distraction for Ashley’s sprawling retail conglomerate.
Bombed-out shares in MySale rallied 37.6% to 1.72p on hopes Frasers can help turn the struggling business round, or maybe buy it outright down the track.
IN TURNAROUND MODE
An international online retailer which connects global buyers and sellers to Australian and New Zealand ecommerce sites, MySale is in recovery mode under a new management team which certainly has its work cut out, as losses widened from A$1 million to A$4.5 million in the half to December 2021.
Nevertheless, deal-hungry Frasers believes the investment ‘creates an opportunity for a strategic partnership whereby end of line group products can be cleared via an established clearance channel’.
The FTSE 250 retailer says ‘this pipeline will be further enhanced by the benefits of counter seasonality between the European and Australian climates.’
BUYING MORE ‘BOSS’
Fraser’s acquisition of a stake in MySale follows a recent increase in its interest in German fashion brand Hugo Boss (BOSS:ETR).
Last week (22 June), Frasers revealed it had increased its stake in the German fashion retailer, which besides its trademark apparel sells shoes, watches, eyewear and stationery items.
Frasers now holds 3.4 million shares of common stock, representing a 4.9% direct stake in Hugo Boss.
It also has a further 26% stake through the sale of put options. Ashley’s charge insisted this investment reflects its ‘belief in the Hugo Boss brand, strategy and management team’ and that it ‘continues to intend to be a supportive stakeholder and create value in the interests of both Frasers Group’s and Hugo Boss’ shareholders.’
ANOTHER BUSY YEAR
2022 has proved another busy period for Frasers, which bought fallen online women’s fashion retailer Missguided out of administration for £20 million in cash at the start of June.
This followed February’s purchase of the operating assets of Studio Group for £26.8 million in cash after the firm called in the administrators.
Frasers was the biggest shareholder in Studio when it was a listed company and Ashley had repeatedly called for a strategic review, described the firm as having ‘buried its head in the sand whilst the world around it changed’.
