Mike Ashley's Frasers Group launches a luxury division and lifts its Burberry stake to 6.32%

British retailer Frasers Group, founded by Mike Ashley, is expanding its push into luxury. In a stock market filing on Monday, 5 October, it disclosed that its stake in Burberry had risen to 6.32% from 4.16%, WWD reported, and it unveiled a new division, Frasers Group Luxury, with a launch event at the Hôtel de Crillon during Paris Fashion Week.

What is in the division

The unit brings together the group’s luxury retailers — Flannels and Harvey Nichols in the UK and The Webster in the US — with its strategic investments in Mulberry, Burberry, Hugo Boss and Hulcan’s Mile, according to WWD and The Business of Fashion. Chief executive Michael Murray said luxury had been a core pillar of the group for more than a decade, generating more than £1 billion in annual sales at a profit across over 100 stores in the UK and US, and that the aim is to scale it globally through organic growth, acquisitions and investments.

An appetite for stakes

Frasers, which also owns Sports Direct, Evans Cycles and Savile Row tailor Gieves & Hawkes, is known for buying struggling businesses cheaply and taking stakes in its suppliers. WWD noted that a failed takeover bid for Hugo Boss this summer still left Frasers with a nearly 50% stake, and that the group has said it plans to buy more Boss shares with the aim of gaining full control. Burberry chief executive Joshua Schulman called Flannels a long-standing wholesale partner that helps the brand reach customers in parts of the UK where it has no stores of its own.