Mike Ashley’s Frasers Group (FRAS) has recently purchased non-controlling shares in a number of British retailers, from fast-fashion group Boohoo (BOO) to electrical business Currys (CURY). The company – which has now been under the leadership of Michael Murray, Ashley’s son-in-law, for over a year – maintains that the purchases are “strategic”. However, some investors and City analysts have questioned whether holding a range of minor stakes is of much, if any, benefit to Frasers' shareholders.
Murray told the Financial Times only a few months into his tenure as chief executive that the business would become more selective with its acquisitions. Under Ashley, it had cultivated something of a reputation among investors for its portfolio of seemingly disparate retail holdings. Last May, the group sold two US-based businesses, Bob’s Stores and Eastern Mountain Sports, for a cash consideration of $70mn. But it has since bought stakes in AO World (AO.) and Asos (ASC), among others – as well as a tiny share in Next (NXT).
Despite Murray’s vow to offload non-core investments, it would appear that Frasers is still pushing ahead with Ashley’s approach to empire-building. The extent of Ashley’s continued involvement with the business is unclear, although The Sunday Times reported that he has been hired as a consultant to advise on operational matters. He formally stepped down as chief executive last year, but remains the group's majority shareholder, with a stake of over 70 per cent, according to FactSet.