Model train set
Hornby shares have started to perk up and the appearance of Frasers on the register has provided a further boost / Image source: Adobe
  • Frasers increases stake to 8.9%
  • Sports Direct-owner a ‘strategic shareholder’
  • Opportunity to sell more products via GAME chain

Mike Ashley-controlled Frasers (FRAS) has shunted its way up the shareholder register at model trains-to-planes maker Hornby (HRN:AIM) as the deal-hungry conglomerate pounces on yet another retail name going through tough times.

Shares in Hornby leapt 40.5% to 29.5p on news Frasers had significantly lifted its stake in the Hornby, Scalextric and Airfix brand owner to 8.9%, although traders counting on an outright takeover bid may be disappointed.


Sports Direct-owner Frasers, which already has stakes in retailers ranging from Currys (CURY) and ASOS (ASC) to Boohoo (BOO:AIM) and N Brown (BWNG:AIM), has snapped up roughly 11.1 million shares in the model and collectibles company, raising its total holding to the best part of 15.2 million shares or 8.9%.

Given so few Hornby shares are freely traded on the market, Frasers will have only been able to get a block of 11.1 million shares from Phoenix Asset Management, which already owns 71.6% of the company, or Artemis, the only other large shareholder on the register.

Frasers finance director Chris Wootton explained that the owner of Sports Direct, as well as House of Fraser and GAME, has a vision ‘to build the planet’s most admired and compelling brand ecosystem. Hornby’s portfolio of unique heritage brands are already part of GAME’s product offer and we look forward to exploring opportunities to further leverage our scale in retail logistics and distribution.’

Hornby chief executive Olly Raeburn remarked that Frasers has ‘built a powerful ecosystem through its brand partners, scaled shared services and distribution channels. We have long admired their approach to merchandising and logistics and welcome them as a supportive shareholder.’


Major shareholder Phoenix is already helping Hornby through its Castelnau (CGL) investment vehicle and sees hidden value in the model trains-to-planes specialist.

It has used two businesses owned by Castelnau to make improvements to Hornby’s websites and digital marketing.

Part of the strategy is for Hornby to develop direct relationships with existing and potential customers and to give greater individuality to its brands.

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Names like Hornby, Airfix and Scalextric are well known to the older generation but Hornby has struggled to make them resonate with a younger audience, partially because its marketing has been ineffective and previous restructuring efforts have flopped resulting in a string of profit warnings.


AJ Bell investment director Russ Mould pointed out that while Hornby’s shares have struggled for years, they’ve recently started to perk up and the appearance of Frasers on the shareholder register has given then another boost.

‘Don’t expect Frasers to launch a takeover bid for the group,’ said Mould. ‘Its style is to only acquire when something is on the verge of going bust as it prefers to pay pennies to buy something outright. Instead, Frasers is more likely to seek strategic conversations about helping Hornby to improve its distribution and logistics while at the same time realising it might be able to make a few quid by investing in its shares.’

Mould continued: ‘At first glance, it’s not the most logical tie-up for Frasers which is best known for sporting equipment and athleisure. Yet Frasers has shown willingness to explore different ways to get consumers to part with their cash. After all, it went from sporting equipment into sofas and computer games which is not a natural path to take.

‘The real connection between Frasers and Hornby is the former’s GAME shops which have progressed from consoles and computer games to now also selling board games, trading cards and toys. Hornby’s products sit on GAME’s shelves and Frasers clearly spots an opportunity to do more.’

DISCLAIMER: Financial services company AJ Bell referenced in this article owns Shares magazine. The author of this article (James Crux) and the editor (Ian Conway) own shares in AJ Bell.


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Issue Date: 23 Feb 2024