Frasers Group, led by Mike Ashley, has once more boosted its share in Boohoo, the quick-fashion company chaired by John Lyttle of Offaly. This expansion increases the holding just above the quarter mark. The company, however, has not indicated whether they plan to proceed with further purchases to reach the 30 per cent mark, which would enforce a mandatory bid for the remainder of the company. Ashley has persistently augmented his shares in Boohoo, spending just over £106m, primarily when the shares were priced at or below 35 pence, since June of last year.
Emphasising ‘expansion through strategic investments’ as the goal, when Frasers initially invested in Boohoo, they pointed out prospective synergies and collaborative development opportunities with Boohoo, particularly in relation to their brands I Saw It First and Missguided. Since then, Frasers Group has added stocks in renowned brands like Currys, Hugo Boss and THG, another online business, to its portfolio.
Currently valued at around £111m, Ashley’s shares in Boohoo have depreciated from their previous value during the pandemic. The plunge in share price coincided with the exposure of forced labour within their supply chain, causing them to implement new methods for raising standards and maintaining human rights across their supply chain.
Furthermore, the company has experienced a sales dip due to heightened competition from Chinese online retail giants like Shein along with the resurgence of high-street sales following the easing of pandemic restrictions. Even the annual results released this February reflected a 13% decrease in Boohoo’s revenues, falling from £2 million to £1.8 million. John Lyttle attributed this slump to hostile market conditions, precipitated by inflation and waning consumer demand. He added that the company is planning to cut costs by £125 million over the next year.