Frasers Group PLC (LSE:FRAS), the retailer controlled by Mike Ashley which owns Sports Direct, has raised its stake in online fast-fashion firm Boohoo Group PLC again.
It now has a 9.1% stake in the company, up from 7.8% when last disclosed, a disclosure said.
Frasers has been picking up shares in a number of other UK retail names this year, including Asos and electronics retailers Currys and AO World.
Russ Mould at AJ Bell said: "Mike Ashley-founded Frasers has developed a reputation for being a vulture – picking at the bones of businesses when they are down.
"While buying assets out of administration is its preferred modus operandi, it also likes buying equity stakes in companies when their shares are weak," he noted.
“Frasers is constantly looking for ways to offer a broader range of products to its customer base and there is a natural crossover between people who shop at Sports Direct and Boohoo," he feels.
“Both sets of customers want casual clothes that don’t cost a lot of money, so there might be an opportunity to put Boohoo’s products into Sports Direct outlets, making it a win/win situation for both parties," he reckons.
"Sports Direct would give shoppers another reason to visit its stores, while Boohoo gets to benefit from having a distribution channel on the high street.
“This is all theoretical – it may simply be that Frasers believes Boohoo’s shares are too cheap and it is buying them purely as an investment, with the intention of selling them if the shares go up in value. However, what’s certain is that Frasers is watching the share price closely as it has been regularly buying more stock all summer,” he said.