Shares in Hugo Boss jumped nearly 10% on Thursday after the German fashion house said it would “thoroughly examine” a near-€2bn takeover approach from Mike Ashley’s Frasers Group.
The offer, announced late on Wednesday, values Hugo Boss at €38 a share — a 4.3% premium to its closing price the previous day — and totals about €1.98bn (£1.73bn). Hugo Boss shares rose to €40.05, while Frasers shares initially fell 2.5% before recovering to gain 1.6%.
“Frasers Group launches €1.98bn takeover bid for Hugo Boss, sending shares up 10%.”
Frasers, which already owns just over a 26% stake in Hugo Boss, has been steadily building its holding since 2020. The growing stake had fuelled years of speculation that the Sports Direct owner might seek full control as part of a broader push upmarket. The deal would bring Hugo Boss into an empire that already includes House of Fraser, Flannels, Gieves & Hawkes, and shareholdings in Asos, Debenhams and Currys.
Hugo Boss said the “unsolicited” offer had “not been coordinated with the company” and that its managing board and supervisory board would “thoroughly examine the offer and issue a reasoned statement, acting in the best interests of the company, its shareholders, employees and customers.”
Frasers said it expected the takeover to be completed by the end of this year, provided it passes all legal checks. Under German law, because Frasers’ stake is close to 30%, it is required to make an offer for the whole company. Frasers also holds options due to vest in the next two years that could give it a majority stake.
JP Morgan Chase said the bid would set a near-term floor for the shares but warned that limited scope for further gains remained, adding that it did not expect a rival bidder to emerge.
The offer comes as Hugo Boss, Germany’s biggest luxury fashion group, has struggled with weaker sales since a post-Covid boom. Its shares are about half of what they were worth three years ago. The company has embarked on a turnaround strategy including store revamps, a streamlined product range and expansion of its womenswear line. It generated €4.3bn in sales last year.
Frasers described itself as “a long-term investor” in Hugo Boss, adding that it “remains supportive” of its chair and chief executive. Last year, Michael Murray, the Frasers chief executive and Ashley’s son-in-law, joined Hugo Boss’s supervisory board, but according to Frasers, he was not involved in the decision to make the offer.
The approach is a more cooperative move than Frasers’ relationship with Debenhams, whose brand is now owned by Boohoo. Frasers, the largest shareholder in Boohoo, blocked a formal name change to ‘Debenhams Group’ last year. Dan Finley, Boohoo’s chief executive, told the BBC this week it would “operate to all intents and purposes as Debenhams Group,” adding that he did not know why Frasers blocked the change.