Mike Ashley’s Frasers Group PLC (LSE:FRAS) is on the cusp of agreeing to a strategic partnership with XXL ASA, the Norwegian sporting goods retailer, to help boost its position in the Nordic region.
Frasers, which owns more than 30% of XXL’s class A shares, said it is aiming to use its brand elevation strategy to help the Oslo-listed company strengthen its Nordic market leadership.
XXL is the largest and fastest sports retailer by revenue in the Nordics.
Michael Murray, Frasers’ chief executive, said: “Partnering with XXL would be a significant step forward in our ambition to becoming a global sports retailer.
“Frasers would benefit from their existing footprint that will drive new avenues of growth for the Group in the sporting goods market.”
Analysts at Shore Capital believe the partnership will take “some time to come through and be transparent” but see plenty of upside should it be correctly overseen.
“If it helps to underpin and strengthen Frasers’ partners, in which it has investments, and kicks into buying capabilities, then it cannot be deemed anything but sensible and good,” Shore Capital said.
“Whether one can say that definitively of Frasers extra-curricular activities is a moot point. We believe that this distinctive, entrepreneurial company has good growth credentials and potential alike and that the Group’s share will follow delivery.”