Stephan Bernstein, CEO of GreenRoc, details the PFS results for the new graphite processing plant. Watch the video here.
We have a clear strategy to identify opportunities to invest in businesses which complement our existing sport, premium and luxury businesses, or help us to build and further utilise our sector-leading ecosystem.
“Boohoo is an attractive proposition to us with its laser focus on young female consumers. We see potential synergies and an opportunity to strengthen our own brand proposition in collaboration with Boohoo, most obviously with Frasers Group brands I Saw It First and Missguided.
“Our investment in Currys provides us with a valuable opportunity to build on our foothold in the electricals industry as well as deepening the existing relationship between Currys and Studio, with the potential for further collaboration between the two.
“Through this investment, we also believe Currys will benefit from Frasers’ deep retail know-how and our sector-leading ecosystem.”
Frasers Group has since sold Manchester-based Misguided to Shein.
I’d agree with almost the entire content. They offer the same view that I believe, neither asos or boohoo are in any real danger. Growth will return, it’s just when in my book.
A ‘theme-park for the retail experience’
To help explain what Frasers Group’s strategy is and what its ultimate aim is, an expert at the University of Salford’s business school points to two quotes from chief executive Michael Murray.
Dr Gordon Fletcher, associate dean of research and innovation at Salford Business School, highlight’s the CEO’s desire for the group to become the “number one sports retailer in EMEA” and to create a “sector-leading ecosystem” across retail..
Dr Fletcher adds that this “does not just mean owning leading High Street brands but bringing them all altogether into a High Street experience owned by the Frasers Group”.
He said: “The Frasers Group is growing and as it takes on a new shape it has the potential to define a key moment in the history of the High Street.
“Over the last 12 months, Frasers Group has increased its stake in Boohoo and in Asos. A potential bargain as both these online retailers have share prices hovering around their historic low after the highs of the Covid period.
“There is also the increased investment and strategic partnership with AO World in September. Considered separately these online retailers duplicate many of their backend functions, driving up operating costs and even competing against one another, but as part of a larger retailer empire there is a potential new future for all three
“Frasers have also been buying up bricks and mortar. The high end Matches and Essex retailer Zee & Co both became part of the group in December.
“From Sports Direct to House of Fraser the group now covers brands that cover the full spectrum of consumer preferences.
“And it is not just retail in the UK that is the target of these activities. After increases in their stake late last year the German sports retailer SportScheck has also become part of the group along with 20 stores in the Netherlands from Unlimited Sports.
“Two key quotes from Fraser’s CEO Michael Murray help to explain what is happening. The goal of becoming the ‘number one sports retailer in EMEA’ positions the new European retailers as part of a wider plan to dominate this part of the sector.
“But these actions are also part of a plan to create a ‘sector-leading ecosystem’ across retail. This does not just mean owning leading High Street brands but bringing them all altogether into a High Street experience owned by the Frasers Group.
“A type of theme-park for the retail experience. The Fraser’s concept stores that are starting to appear present a taste of the future.
“With The Mall in Luton and Dundee’s Overgate Centre now part of the group’s real estate portfolio and Sheffield’s Meadowhall a further potential target for purchase, the future high street could be Fraser’s high street all presented within the protective space of the nearest shopping centre.”
….Frasers seems capable of spotting hidden value in almost every entity and that’s why it has such a large portfolio of equity investments.
“It would be wrong to assume these investments are a precursor to full takeovers. Instead, they are principally about engaging with a competitor’s management and seeing how it can learn from them and find ways to collaborate.
“For example, its 23 per cent stake in AO purchased last year has facilitated conversations between the two companies about how Frasers can benefit from AO’s knowledge in two-man delivery and electricals.
“Remember that Frasers sells bulky sports equipment through Sports Direct and three-piece suites through its Sofa.com brand, so any way to improve deliveries could be a big win, while it sells electricals through House of Fraser.
“The stake in Boohoo looks to be a way of Frasers getting its products distributed through more channels and getting more third-party goods into its own stores.
It’s worth considering that Frasers might simply view some investments as a way to make a quick buck – a chance to buy shares on the cheap and then flip them should the investee company see an improvement in trading
Analyst Dan Coatsworth
“Frasers’ brand I Saw It First is a perfect match for Boohoo and it has been exploring ways to collaborate.
“In a similar vein, keep a close eye on Frasers’ relationship with Shein, having recently sold the Missguided brand to the Chinese retailer.
“Shein recently struck a deal with the owner of Forever 21 in the US, with each party taking an equity stake in the other. Shein is now selling a co-branded clothing line that is primarily sold on its website.
“It now also has a way for buyers to return online orders in stores by utilising Forever 21’s shop network. One can only imagine that Frasers would love a similar deal and it has already flagged talks about a potential collaboration with Shein across its brand portfolio.
“Frasers’ style is not to make takeovers unless it can pay rock bottom price and that means waiting until they effectively go bust.
“Over the years it has shown ferocious appetite to pick at the bones of companies when they go into administration, acting like a vulture which hasn’t eaten for days.
“This implies we should not expect takeover bids for Boohoo, AO and other current investments such as Mulberry and Asos despite Frasers owning a sizeable chunk of their equity. These businesses might be experiencing some pains but they are certainly nowhere near danger territory.
“Despite the logic around strategic conversations, it’s worth considering that Frasers might simply view some investments as a way to make a quick buck – a chance to buy shares on the cheap and then flip them should the investee company see an improvement in trading.”
Frasers Group first invested in Currys in 2023.
Frasers Group first invested in Currys in 2023.
A ‘theme-park for the
Https://uk.finance.yahoo.com/news/frasers-group-mike-ashley-retail-102744583.html
Frasers Group’s “love for a bargain” has seen it snap up sizeable stakes in a range of retail brands listed on the London Stock Exchange.
The latest investments came this week when the Derbyshire-headquartered giant, which was founded by billionaire Mike Ashley, increased its shareholding in fast-fashion group Boohoo to 22 per cent. It first bought shares in June 2023 and became its largest single shareholder in October, passing co-founder Mahmud Kamani.
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The group has also upped its stake in Boohoo rival Asos to almost 26 per cent and is now within touching distance of also becoming its largest single investor.
But these two brands are far from the only two that the retail giant, which was formally called Sports Direct until a rebrand a few years ago, has bought sizeable stakes in over the last 18 months or so.
In June 2023, the group bought almost 20 per cent of Bolton-headquartered white goods retailer AO in a £75m move, which has since been upped to 23 per cent to make it AO’s largest single shareholder.
Frasers Group has also built a large shareholding in JD Williams, Jacamo and Simply Be owner N Brown after first acquiring a 4.5 per cent stake in October 2022.
It now holds almost 20 per cent of the Manchester-headquartered retailer, placing it second behind largest shareholder Lord David Alliance.
At the same time it first acquired shares in Boohoo, Frasers Group also took the opportunity to buy into electricals retailer Currys and now holds just over 11 per cent of its shares.
Asos is among the brands that Frasers Group has a large shareholding in.
Asos is among the brands that Frasers Group has a large shareholding in.
A ‘ferocious appetite to pick at the bones of companies’
What all these companies have in common is their share prices at the time Frasers Group first made its move.
The likes of Boohoo and Asos saw their share price surge during the height of the Covid-19 pandemic as online shopping dominated while the UK was in lockdown.
However, as the high street returned to near normal conditions, these brands saw their share price slashed while investors were also turned off by a series of profit warnings and disappointing trading results.
It might be an easy assumption to make that Frasers Group has made these huge investments in order to one day take full control of these companies. But that would be “wrong” according to a top AJ Bell analyst who argues the moves are “principally about engaging with a competitor’s management and seeing how it can learn from them and find ways to collaborate”.
Dan Coatsworth said: “Frasers loves a bargain, both in terms of selling high volumes of goods at cheap prices via Sports Direct as well as taking equity stakes in businesses when they have fallen in the gutter. It just can’t help itself when a quoted retail business has experience
Sub 200’s would only occur if results are disastrous. Would have to be a serious downturn in sales and customer numbers for that to materialise or a significant concern about the balance sheet imo. Sub 200’s would be nearly half the current sp and bearing in mind the company has already painted a very gloomy outlook, it would take something extremely dismal to bring that about imo James.
Good shout knowbody.
Also, they weren’t obliged to provide a mandatory bid with Burberry because a majority shareholder with 50%+ shares already existed. However they were required to formally state their intentions.
It’s different here however because we don’t have a major shareholder with a 30%+ holding. Therefore a bid is mandatory should MA accumulate 30%+.
All that said he built a shareholding of 25% in French Connection and later sold the entire holding from memory.
They’ve been acquiring shares left right and centre in different business and many with similar holdings as asos, so it’s not a foregone conclusion that Frasers will bid. That said, he has always wanted TopShop…
Https://apparelresources.com/business-news/retail/nike-searched-e-commerce-brand-uk-says-report/
This link works!
Https://ww.fashionnetwork.com/news/Nike-most-searched-online-brand-ann-summers-visibility-growing-fastest-report,1593230.html
ASOS fifth most prominent brand in uk. Still relevant. Still popular.
A really interesting read..
https://www.ft.com/content/15a0711c-2d68-45be-8b73-84257b925329
Some bits that stood out to me:
“Mitel recently found that 51 per cent of female fashion shoppers chose a retailer that did not charge for returns”.
IMO it’s currently an easy way to gain business - and while it is an impact to profit margins at the moment - I don’t think now is the right time to change the return structure. Asos will stick to their current model until the road to recovery is more certain imo.
“Temu overtook Amazon as the most-downloaded shopping app in the US just months after launching, according to the Business of Fashion-McKinsey State of Fashion 2024 report. Shein reached $22.7bn in annual sales in 2022, and is gearing up for a public listing in the US.
Mintel’s Sender Ceron says the Asian duo are “worlds apart”, describing them as “a huge threat to Asos and Boohoo and fashion pure-plays but also to H&M and Zara just because of their ultra-low prices, their turnaround times, and use of social media.”
I think we have to constantly be aware of their threat , however I also believe that asos website traffic shows there is room for several large players in the market. We just can’t afford to take our eye off the ball.
“Analysts at Jefferies believe the weak trends across the ecommerce clothing sector are “a result of the ongoing retrenchment of online penetration” that has left even Shein’s growth slowing in 2023, according to its Retail Trends Barometer.
But few believe that online retail has passed its peak. Forrester Research expects online retail sales growth to rebound to pre-pandemic levels in 2024. Its analysts forecast that combined online retail sales in Germany, the UK, France, Italy, and Spain will increase from €372bn in 2023 to €579bn in 2028, equivalent to a 9.2 per cent increase each year.
But she warns that the market cannot support the number of players it currently has. “There’s not room for all of them and there will eventually be consolidation”.
This made me feel more confident. Even shein has been impacted (I shared the data yesterday showing the significant decrease in traffic to shein). Important imo because it shows the issue is not company specific and more online only clothing retailers in general at the moment. Also shows the enormous projected growth between now and 2028.
Even more interesting is the part about there eventually being a consolidation. Let’s hope we aren’t swallowed up on the cheap and if we are taken over, there’s a decent premium.
Worth a read of the whole article as I’ve only picked out a couple of things that stood out to me. Lots of ASOS content in the article for anyone that wants a read.
GLA.
Https://www.marketing-beat.co.uk/2024/01/09/asos-global-brand-agency/
If it went up to a fiver I’d say a leak but not with a small move like that. Here’s hoping though. The negative news won’t last forever, if the company is managed correctly. When a wave of positive news starts to come, then we’ll reverse fast imo.
Not the update I was hoping for. Website traffic for December was down 6.49% (68.6 million visits were made to the site in the month). I’ve manually collated some info from similarweb to give an overview of different companies performance in the sector. Not too disappointing in comparison to online only peers, although not an increase in visits over December. The outliers remain M&S and Next who seem to have the winning formula at present. Definitely shows the correlation that can exist between visits, sales output and sp.
Change in website visits from previous month:
Next up 25.94%
Marks up 20.63%
JD sports UK up 3.26%
Zara down 5.53%
ASOS down 6.49%
Boohoo down 7.42%
Zalando down 9.49%
HM down 11.26%
Shein.com down 17.73%
Shein.co.uk down 20.95% (This one brought a smile)
Numbers not terrible for ASOS and Boohoo but clearly work to do. This is where I hope the marketing spend will make a difference.
Here is the site I use for info. Has lots of useful stats and gives you the ability to compare companies should anyone wish to:
https://www.similarweb.com/website/asos.com/
GLA