Frasers Group, formerly known as Sports Direct International, has bought a 5.1% stake in German luxury fashion brand Hugo Boss.
The Mike Ashley-owned company has acquired the stake through stocks and derivatives and says it is consistent with its long-standing strategy of taking strategic investments.
The purchase comprised 120,000 shares of common stock, 140,000 shares of common stock via contracts for difference, and 3,290,000 shares of common stock via the sale of put options.
After taking into account the premium it will receive under the put options, Frasers Group says its maximum aggregate exposure in connection with its acquired interests in Hugo Boss is around EUR108m (US$121.5m).
“This investment reflects Frasers Group’s growing relationship with Hugo Boss and belief in Hugo Boss’ long-term future,” the company said in a filing. “Frasers Group intends to be a supportive stakeholder and create value in the interests of both Frasers Group’s and Hugo Boss’ shareholders.”
Just months ago, Frasers Group, whose stores include House of Fraser, Jack Wills, Flannels and Sports Direct, warned on profits amid the fallout from the global Covid-19 pandemic.
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalDataThe company said the outbreak is causing “significant disruption” to its business, including reducing customer footfall. As a result, it doesn’t expect to reach its guidance of 5% to 15% EBITDA growth for the current financial year ending 26 April.
