IN a strategic move, Mike Ashley’s Frasers group has surged ahead of Boohoo’s founder, Mahmud Kamani, to become the largest single shareholder in the fast-fashion retail giant, reported The Telegraph.
Regulatory filings on Friday (6) revealed that Frasers group had increased its stake in Boohoo to 13.4 per cent, following a series of share purchases over recent months.
Previously, in June, it was disclosed that Frasers group had acquired an initial 5 per cent stake in Boohoo. With this latest purchase, Frasers now holds the highest individual stake in Boohoo, surpassing Mahmud Kamani, who maintains a 12.5 per cent stake.
When considering the Kamani family’s holdings and Boohoo co-founder Carol Kane’s shares, their combined stake totals approximately 25 per cent, giving them a larger share portion, according to the report.
This move comes amidst a longstanding rivalry between Ashley and Kamani, both self-made millionaires who have consistently sought to expand their business empires through strategic acquisitions.
Notably, there was a battle for control of the department store Debenhams, with Boohoo ultimately emerged victorious.
Reports said that Frasers group incurred an estimated loss of £150 million in the process, having amassed a 30 per cent stake in Debenhams before its collapse.
The group had previously considered a takeover of Debenhams and had attempted to remove its management before the company’s administration. Subsequently, Ashley initiated legal action against Debenhams’ advisors.
The purchase of additional Boohoo shares occurred on Tuesday (3), coinciding with a significant drop in Boohoo’s share price to an eight-year low, following the release of the retailer’s interim results.
Boohoo reported that fewer shoppers were visiting its website and spending less, despite price reductions aimed at attracting financially constrained customers. The number of visitors to Boohoo’s website had declined by two million compared to the previous year.
This share price decline adds to months of negative performance, with over 90 per cent of Boohoo’s market value eroded since June 2020.
Frasers group’s ambition extends beyond Boohoo, as it actively seeks to expand its presence in the online retail sector.
The company has also accumulated significant stakes in AO World (22 per cent) and Asos (19 per cent).
“Boohoo is an attractive proposition to us with its laser focus on young female consumers. We see potential synergies and an opportunity to strengthen our own brand proposition in collaboration with Boohoo, most obviously with Frasers Group brands I Saw It First and Missguided,” a spokesperson for Frasers group said when it announced decision to buy shares in Boohoo.