Frasers Group has bought a significant stake in THG after the e-commerce group said it expects to return to growth this year.
THG has just completed the demerger of its tech business Ingenuity in efforts to slash costs and right-size the group, which has suffered heavy losses, slowing e-commerce demand and corporate governance issues since its 2021 London IPO.
Its founder Matt Moulding has also blamed high interest rates, Brexit and ‘the dwindling capital pool’ of the London bourse.
Frasers, which has built stakes in several consumer businesses in recent years, has now taken a stake in THG equivalent to almost 4.8 per cent of the business, according to a stock market filing on Tuesday.
The retail giant had previously bought £10million in shares as part of a £95.4million fundraising by THG, after buying a group of the firm’s luxury goods websites.
The move into luxury is part of the ‘elevation’ strategy under chief executive Michael Murray, who is married to owner Mike Ashley’s daughter Anna.
THG founder Matt Moulding has blamed high interest rates, Brexit and ‘the dwindling capital pool’ of the London bourse for the firm’s losses
Murray said last year Frasers was working with THG to unlock ‘further benefits for both businesses’.
THG shares jumped 6.5 per cent to 42.59p at the open on Tuesday in response to Frasers’ newly-disclosed stake.
They have still fallen roughly 40 per cent over the last 12 months and more than 90 per cent since listing on the London Stock Exchange at 796.2p in January 2021.
The companies Mike Ashley’s Frasers has built stakes in include Hugo Boss, AO World, Marks Electrical, Asos, Mulberry and Accent Group.
Its large holding in Boohoo has led to a bitter fight over the fast fashion retailer’s leadership and future.
This last month culminated in investors rejecting plans to oust co-founder Mahmud Kamani, and appoint Ashley and a colleague to its board.
Separately on Tuesday, THG announced the appointment of former Tesco and Marks & Spencer exec Milyae Park as a non-executive director.
Charles Allen, Lord Allen of Kensington CBE and independent chair, said Park’s ‘knowledge, skills and network will complement our very experienced board’.
He added that Park, who currently sits on the board of Alliance Witan, Faber and Faber and Fidelity European Trust, has ‘a strong track record in international retail, consumer and digital businesses, as well as a notable advocate for sustainability, diversity, equity and inclusion’.
Park said: ‘I have long admired THG’s commitment to innovation and excellence, and I look forward to working closely with Charles, Matthew and the rest of the Board to contribute to the Group’s continued success and global expansion.’
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