Online fashion retailer Asos is set to confirm that the billionaire retailer mike ashley acquired a stake of more than 5% in the company.
Asos’ statement to investors could come as early as Monday morning, before the London Stock Exchange reopens after the weekend.
Ashley’s fashion and sportswear retailer Fraser Group Asos informed on Friday that it had become one of the company’s largest shareholders. This decision made Frasers the fourth shareholder of Asos. It was required to inform Asos as soon as its stake in the company reached 5%.
Frasers first took a small stake in Asos earlier in the year, continuing the company’s record of building stakes in other retailers, making it one of the few companies expansion on main street. Frasers’ increased stake, first reported by the Telegraph, came after Asos reported a slowdown in sales and a pre-tax loss of £32m in the year to August.
Like many retailers, Asos has issued a profit warning as it grapples with rising energy and staff costs, combined with the impact of a weak pound and shoppers limiting their spending in the midst of the cost of living crisis.
asos the stock price plunged by more than 80% in the past year, and the retailer has revealed in recent days that it has agreed a £650m bank facility to give it “financial flexibility”.
The company said it would cancel more than £100m of shares and cut costs in response to tougher trading conditions.
Asos’ new chief executive said last week that the company had become too complex and had become “globally outdated” as it tried to attract buyers outside the UK, on markets such as the United States, France and Germany.
José Antonio Ramos Calamonte said he would work to buy his inventory more frequently and closer to the time of sale, to ensure he had the right fashions to offer customers.
Frasers has continued to acquire other retail businesses in recent months: in July he snapped up online fast fashion specialist I Saw It Firsta month after acquiring online fashion retailer Missguided from administration for £20 million in cash.
Frasers recently joined the FTSE 100 index of leading shares after six years of absence. The group, which previously traded as Sports Direct, dropped from the index in 2016 when its share price fell after a Guardian investigation found poor wages and working conditions to the company as well as the poor trade in its stores.
Ashley expanded her retail empire in 2018 with the purchase of the collapse of the House of Fraser department store chainand in recent years he has also invested heavily in the Flannels chain.
He left the board Fraser Group earlier in October, after 40 years at the helm, when the company said it would not show up as a director at the group’s annual meeting. However, he remains the company’s majority shareholder, with a nearly 70% stake, and continues to act as an advisor to the board and senior management.
A spokesperson for Frasers only said the group “makes strategic investments in the normal course of business, to develop relationships and partnerships with other retailers, suppliers and brands”.
Asos declined to comment on Frasers’ increased stake.