Frasers raises Burberry stake to 6.32% and unveils luxury division

Frasers Group has raised its holding in Burberry to 6.32 percent, up from 4.16 percent, according to a stock market filing made public on Monday. The disclosure arrived on the same day the British retailer unveiled a new structure for its high-end businesses.

The new division, called Frasers Group Luxury, now lists Burberry among the brands inside what the group calls its luxury ecosystem. The company framed the unit as a portfolio of "distinctive luxury businesses, digital capabilities, and investments" with longstanding strategic brand partners at its core.

Frasers touted more than a decade of experience in luxury and what it called trusted relationships with strategic brand partners. It said the division combines the group's expertise and reach with the commercial discipline that underpins the wider business.

What the division contains

The unit includes the British retailers Flannels and Harvey Nichols, plus The Webster in the United States, in which Frasers took a majority stake last year. It also lists strategic investments in Mulberry, Burberry, Hugo Boss and Hulcan Mile as part of the grouping.

Michael Murray, Frasers Group chief executive, said luxury has been a core pillar of the group for more than a decade, generating more than £1 billion in annual sales and a profit. The ambition, he said, is to scale the division globally through organic expansion, acquisitions and strategic investments.

"With over 100 stores across the UK and US, we've built the expertise, scale and brand relationships to support our next phase of growth," Murray added. The group is hosting a launch event at the Hôtel de Crillon in Paris on Monday night during Paris Fashion Week.

Burberry chief executive Joshua Schulman said the company values Flannels as a long-standing wholesale partner. He said its store network helps reach Burberry customers across the UK, particularly in areas where the brand has no directly operated stores.

Burberry, the trench coat maker founded in 1856, is the last major British luxury house still independent, publicly traded on the London Stock Exchange. With no parent in control, there is nobody to cushion a slowdown, and Frasers is now a larger shareholder.

When we profiled Burberry's ownership, we noted that the lack of a controlling family or conglomerate leaves the house exposed to a takeover. We also noted Schulman's Burberry Forward reset, which refocuses on outerwear and scarves and cuts costs.

Laure Heriard Dubreuil, founder of The Webster, said Frasers has fully supported the retailer since taking its majority stake. The store will unveil a renovated space in November within the Bal Harbour Shops West expansion, and it plans to revamp its South Beach flagship on Collins Avenue.

Alexis Mourot, chief executive of Christian Louboutin, said the company has built "a strong partnership" with Frasers over the years, based on trust, open dialogue and a shared ambition to grow together. He said he looks forward to the new chapter.

The Ashley playbook

Frasers Group also owns Sports Direct, Evans Cycles and Gieves & Hawkes on Savile Row. Its founder and dealmaker-in-chief is the retail tycoon Mike Ashley, known for buying struggling companies cheaply, or straight out of administration, and for taking strategic stakes in brand suppliers.

Over the summer Ashley launched a takeover bid for Hugo Boss that ultimately failed but still left the group with a stake of nearly 50 percent. Afterwards Frasers ejected Stephan Sturm as chairman of the Boss supervisory board and replaced him with Murray, Ashley's son-in-law.

We reported Murray's confirmation as Hugo Boss supervisory board chairman, and the failed bid has not cooled the group. Frasers said earlier this month that it planned to buy further shares in Hugo Boss with the aim of gaining full control of the German company.

In late 2023 Frasers bought the fashion retailer Matches in a fire sale, then closed it a few months later, judging it too costly to repair. The Matches name and its in-house label Raey went to Hulcan Mile, the digital retail group, and a relaunch is set for later this year.

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Images: Courtesy of The Webster; Frasers Group