Frasers Group’s CFO has defended the firm’s actions in buying distressed business and sometimes shuttering them relatively quickly.
Photo: Sandra Halliday
The group is a serial acquirer of businesses and takes major stakes in others but not all of its investments have worked out well. And when a business is put into insolvency quite soon after its purchase, it can lead to allegations of a lack of commitment to a turnaround and asset-stripping.
The Times reported CFO Chris Wootton saying criticism of its strategy is “unfair” and “a lot of what we acquire is very, very distressed businesses that are bankrupt. Without us saving them there has to be efficiencies found because … that’s why they went into bankruptcy in the first place”.
He added: “We feel we can turn these businesses around and make them successful by bringing them into the Frasers Group ecosystem. We’re very good at it and we’ve done it multiple, multiple times.”
Struggling businesses the company has acquired include Matchesfashion, House of Fraser, Jack Wills, Sofa.com, Evans Cycles and Missguided with restructuring processes or liquidation following.
Matchesfashion was bought for a reported £52 million just before Christmas 2023 then put into administration in March 2024. That company had a value of over £800 million a few years earlier and its CEO at the time it was sold to Frasers said it could have been saved. The company retains ownership of the brand and there have since been unconfirmed rumours that the group may reinvent it as an ultra-luxe members-only shopping option.
The Matches swift administration post-acquisition generated particular criticism from brands, creditors and employees for the speed of it happening and the impact on a number of labels big and small.
But The Times reported Wootton saying it was “massively loss-making… We went in with our eyes open that it was going to be difficult to turn around and it proved to be. It wasn’t like we went in with our eyes closed. We knew what would happen and ultimately we took a very quick decision to put it back into administration because we didn’t feel we could, you know, turn it around successfully”.
Frasers continues to buy businesses outright as well as snapping up bargain-priced stakes in others and in the last year, the value of its investment in Hugo Boss increased to over £410 million. The company has most recently raised its holding to 32%. Its holding in THG also jumped to over £44 million. It has major stakes in Mulberry, ASOS and Debenhams Group too.
It had tried to take over Mulberry but despite its big stake, majority shareholder Challice owns more than half the shares so will always be able to outvote it. As for Debenhams Group, it has a close-to-30% stake and has had an ongoing dispute with leadership there.
