16 October 2023 , 09:18
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Mike Ashley's Frasers Group has increased its stake in Boohoo, making it the biggest single shareholder of the fast fashion firm. The owner of Sports Direct and Flannels brands now owns 15.1% of Boohoo, up from 13.4%, with a total of 191.8 million shares.
Earlier this month, Frasers overtook Boohoo co-founder Mahmud Kamani to become the largest single shareholder. The latest move means Frasers' stake in Boohoo is worth £56.6 million, based on Friday's closing share price.
Frasers first bought a stake in Boohoo in June, initially taking a 5% holding. They saw "potential synergies" between Boohoo and two of its brands, I Saw It First and Missguided, hoping for collaborations.
Previously, Mr Kamani was the biggest individual shareholder in Boohoo, with a 12.9% stake. Together with his co-founder, Carol Kane, they held an aggregate stake of 25%.
Boohoo's share price has fallen by 43% over the past six months due to the cost-of-living crisis and a turnaround plan. Earlier this month, Boohoo warned that full-year sales could drop by up to 17% as shoppers cut back.
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Boohoo, the popular online fashion retailer, has warned that its profits may take a hit due to slower sales recovery and a shift towards more profitable labels. The company now expects its underlying earnings for the year ending next February to be between £58 million and £70 million.
In an attempt to attract customers during the cost-of-living crisis, Boohoo is slashing prices while also cutting costs as part of a major overhaul. This comes as Frasers Group, owned by former Newcastle United boss Mr Ashley, continues to buy stakes in rival retailers, including an 8.9% stake in Currys and nearly 20% in Asos.
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