Frasers ups bet on Hugo Boss
Frasers Group, a U.K.-based retail conglomerate, said it boosted its direct stake in the German luxury brand Hugo Boss, from 2.1% to 4.9%, or 3.4 million shares of common stock.
- Frasers also increased its indirect exposure to nearly 18.3 million shares via the sale of put options, which represents 26% of the brand's common stock.
Why it matters: While companies with exposure to consumers who earn less than $25,000 per year are under pressure — due to inflation and the risk of recession — luxury sales are booming.
- Hugo Boss said sales in the first quarter increased 55% from a year earlier to about €770 million, a record, while net income was back in the black at €26 million compared with an €8 million loss.
Details: The direct stake and put options combined are valued at €900 million, Frasers noted, or nearly $950 million.
- "Frasers Group continues to intend to be a supportive stakeholder and create value in the interests of both Frasers Group's and Hugo Boss' shareholders," the company said in a statement.
Flashback: The investment in Hugo Boss is a familiar page from Frasers' playbook, akin to past bets made on Finish Line and Adidas, the Financial Times reports.
Worth noting: Frasers, formerly Sports Direct, also owns brands such as Flannels (for which Hugo Boss is a supplier), Evans Cycles, 18Montrose, Jacks Wills and USC.