Frasers takes majority stake in Hugo Boss, which becomes subsidiary

Frasers Group has taken its stake in Hugo Boss above 50%, making the German fashion company a subsidiary of the British retailer and bringing its financial results into Frasers’ accounts.

Frasers said it bought 198,666 shares on 23 October for €7.63 million, taking its holding to 50.08%. The company also has interests in up to a further 21.87% of Hugo Boss through sold put options, which could require it to buy those shares if the options are exercised.

The change gives Frasers majority ownership, but not necessarily control of Hugo Boss’s day-to-day decisions. In its announcement, Frasers said German law leaves daily management to Hugo Boss’s management board, which reports to the company’s supervisory board, and that Frasers’ influence over those activities may therefore be limited.

Frasers said it expects Hugo Boss’s earnings, assets and liabilities to be consolidated into its own accounts. Its announcement also cautioned that the financial figures it presented to illustrate the effect of the deal were unaudited and hypothetical.

Frasers is led by Michael Murray, whose father-in-law is its founder, Mike Ashley. The group owns retailers including Sports Direct, Flannels and House of Fraser. It had pursued a controlling position in Hugo Boss after a €38-a-share cash offer in June failed to win majority support, according to ANP/Bloomberg.