Mike Ashley, owner of Sports Direct, has become the fourth-largest shareholder in online fashion retailer ASOS.

Billionaire Mike Ashley, who owns Frasers Group, now owns 5.1% of ASOS after building up shares in the company that holds the Topshop brand. As a result, shares in ASOS were up 2.1% just after 09:00 AM GMT. Frasers, previously known as Sports Direct, is on a drive to move upmarket as it also stated today that it owns 4.3% of Hugo Boss stock directly and a further 28.5% through the sale of derivatives known as ‘put options.

A ‘put option’ is an agreement where the owner has the right to sell an asset at a future date and at a predetermined price. Comparing with normal shares, purchasing put options does not contribute to owning a majority stake or gaining voting rights in a company.  

The one-time British poster child for the shift to online fashion retailing, ASOS, announced last Wednesday it would revamp its business model after the current pressures from the economic crisis and the several operational issues which hammered its profits. Its share price plummeted nearly 80% over the past year.

A Frasers spokesperson on the ASOS stake, “Frasers Group has a long history of making strategic investments to develop relationships and partnerships with other retailers, suppliers and brands”. Adding that it has extensive aspirations to expand further in the UK and beyond.   

Furthermore, FG revealed a 4.5% stake in online clothing retailer N Brown earlier in the month and is also looking to acquire full ownership of Australian online retailer Mysale. In June the group gained ownership of ASOS’ rival Missguided, pulling it out of Administration for £20 million. Also, in February it bought online retailer Studio Retail.

Mr Ashley has stepped down earlier in the year as chief executive of the company, his successor is Michael Murray, his son-in-law. However, Mike Ashley remains as there controlling shareholder in the group.

(Sources: investing.com, bbc.co.uk, reuters.com)