Frasers Group said that its new holding in its fellow listed company would allow it to find synergies and make its own brands stronger.
The business, majority owned by Mike Ashley, revealed on Tuesday morning that it had taken a 5 per cent stake in Boohoo a day after purchasing 8.9 per cent of the shares in electricals retailer Currys.
“Boohoo is an attractive proposition to us with its laser focus on young female consumers,” Frasers said in a statement on Tuesday morning.
“We see potential synergies and an opportunity to strengthen our own brand proposition in collaboration with Boohoo, most obviously with Frasers Group brands I Saw It First and Missguided.”
It added that investments are “a core part” of the company’s DNA.
“We have a clear strategy to identify opportunities to invest in businesses which complement our existing sport, premium and luxury businesses, or help us to build and further utilise our sector-leading ecosystem.”
It said that the investment in Currys will help it build on its foothold in the electricals industry and said that Currys could also benefit from Frasers’ knowledge of the retail industry.
Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: “Frasers Group is putting its fingers into more retail pies, snapping up slices of companies which have proved unappetising for investors in recent years.
“Boohoo and Currys have struggled with falling sales as the cost-of-living crisis affects discretionary spending, but Frasers Group clearly sees significant value in both companies, once inflationary winds die down.
“It also bought up a stake in AO World, the electrical retailer hit by the post-pandemic shifts in spending, which has been showing positive signs from its turnaround strategy.”
By August Graham, PA Business Reporter