Mike Ashley's Frasers lifts stake in Asos again to 10.6%

Mike Ashley's Frasers Group has lifted its stake again in troubled online fashion outlet Asos to 10.6%, the company announced on Thursday.

The increase is the fourth in a month. Frasers's increased its stake in Asos to 9.9% last week, after lifting it to 8.8% on June 1, and 7.4% on May 15, from a previous holding of 5.1%.

Asos said third-quarter sales fell 14%, but posted a rise in core earnings as it claimed its turnaround strategy was starting to bear fruit.

Adjusted earnings before interest and tax (EBIT) rose more than £20m in the three months to May 31, with EBIT margin up 250 basis points. Asos maintained its forecast for second-half adjusted EBIT of £40 – 60m.

Revenue for the period slipped to £858.9m from £964.1m, with the company citing “deliberate actions on capital allocation to improve profitability”.

Shares in the group have slumped 71% in the past year as the company deals with a reopening of physical retail chains after the Covid pandemic, a higher rate of returns and fierce competition from Chinese rival Shein.

It has already said that sales slumped about 15% in March and April when it reported a first half loss and guided to a "low double digit" sales decline for the second half.

Reporting by Frank Prenesti for Sharecast.com