Hugo Boss Will Still Become a "Subsidiary" of the British Retailer Despite the Collapse of the Takeover

British retailer Frasers Group, which owns, among other things, the Sports Direct chain of sporting goods stores, has increased its stake in German clothing manufacturer Hugo Boss to 50.08%. As a result, Hugo Boss will become its subsidiary. Frasers, controlled by billionaire Mike Ashley, had previously attempted to acquire the German fashion house outright, but Hugo Boss rejected its €2 billion offer, calling it “financially unsound.”

On October 23, Frasers purchased an additional 198,666 shares of Hugo Boss for approximately €7.6 million ($8.51 million), the company said in a statement to the London Stock Exchange. As a result, its stake grew to nearly 34.5 million shares, or 50.08% of the company’s capital. Previously, the British company’s stake in Hugo Boss stood at approximately 48%, according to Bloomberg.

Since Frasers has surpassed the 50% threshold, Hugo Boss’s financial results, as well as its assets and liabilities, will be included in the British group’s consolidated financial statements. However, a Hugo Boss spokesperson stated that the increase in ownership will not lead to any significant changes in Frasers’ influence over the company or in its day-to-day operations, according to Bloomberg.

In June, Frasers offered to buy Hugo Boss shares for €38 each (at the time, this offer represented a 4% premium over the market price of Hugo Boss shares). The German company recommended that shareholders reject the offer, considering the price to be too low.

Frasers has been increasing its stake in Hugo Boss since 2020. As Bloomberg notes, the British group is known for acquiring stakes in European retailers and then pushing for changes in their operations. Its growing influence over Hugo Boss has raised concerns among some investors regarding the independence of the German company’s supervisory board.

In September, Stefan Sturm, chairman of the Hugo Boss supervisory board, resigned after Frasers repeatedly questioned its support for his candidacy. Frasers CEO Michael Murray—Mike Ashley’s son-in-law—took over as chairman of the German company’s supervisory board, Bloomberg reports.

In recent years, Frasers has been expanding its presence in the premium and luxury goods segment. It has acquired stakes in the British brands Mulberry and Burberry, and in August, it purchased the well-known department store chain Harvey Nichols through bankruptcy proceedings.

In September, Murray stated that he sees “significant untapped potential” in Hugo Boss and aims to create “sustainable value for all shareholders and stakeholders.” Frasers declined to comment on its future plans for the German brand beyond the published statement.

Frasers shares closed up 0.3% on October 23, while Hugo Boss shares fell 0.8%.

This article was AI-translated and verified by a human editor