ASOS shares gained tentatively on Monday morning following news Mike Ashley and Frasers Group increased their stake in ASOS to 5.1%.
Ashley is famous for sweeping up troubled retailers and the near 80% drop in ASOS shares this year has proved too tempting for him and Fraser’s Group to build a position.
Frasers Group also announced a strategic investment in Hugo Boss.
“Fresh from standing down from his day job at Frasers Mike Ashley is reportedly on manoeuvres, extending his stake in fashion brand Hugo Boss and taking a position in troubled online retailer ASOS. Clearly the retail kingpin is not done with the sector just yet,” said AJ Bell financial analyst, Danni Hewson.
“ASOS’ financial results revealed some significant problems for the business as spending by its core demographic dries up and the company faces rising costs and a more perilous balance sheet position, but Ashley clearly believes there is still value in the brand.”
UK retailers have taken a beating this year as the cost of living crisis and rising interest rates squeeze retail sales.
Frasers Group has stepped in to buy failing retailers including Game, House of Frasers and Evans Cycles and economic downturns such as the one we could see through the winter will have Mike Ashley licking his lips.