Billionaires clash over future of beleaguered fast fashion star Asos
Billionaires clash over the future of beleaguered Asos, fearing it could become fast fashion’s latest victim
Fears are mounting that Asos, which is at the center of a battle between warring tycoons, could become fast fashion’s latest victim.
Once a lockdown winner and stock market darling, shares of the retailer have plummeted since the pandemic as young women turn their backs on ordering cheap clothes online.
Dire trading and mounting debt forced the retailer to raise £75m in fresh capital in May.
The company posted a loss of £291 million in the six months to March.
Credit insurers withdrew coverage last week fearing it would struggle to meet its commitments to suppliers.
Holding: Retail titan Mike Ashley (pictured) last week increased his stake in Asos, which he owned through his firm Frasers Group, to 9.9%
Shares are hovering around £3.33, after peaking at £77.30 five years ago and trading close to £60 during the pandemic – making the company a sitting duck as rumors circulate whether it can be copied.
Its fate rests in the hands of its three largest shareholders, Danish billionaire Anders Povlsen, American hedge fund baron William Barker and retail giant Mike Ashley.
Povlsen has the largest interest with 22 percent. Barker, modeled after his hero Warren Buffett, owns 13 percent through his fund Camelot Capital.
Ashley increased his stake, held through his firm Frasers Group, to 9.9 percent last week.
Clive Black, retail analyst at Shore Capital, said: ‘It’s a real cast of characters, all competing and competing for position on Asos’ future. I’d like to be a fly on the wall when all three are in one room.’
Povlsen, 50, is a reclusive and the richest of the three with a fortune of £8.5 billion.
He is Scotland’s largest landowner and a true Monarch of the Glen, driving around his properties in a battered VW Golf.
He and his wife, Anne, own 221,000 acres of land across 13 Highland estates. The Dane owes his fortune to Bestseller, the huge fashion empire founded in 1975 by his father Troels.
Top shareholder: Danish magnate Anders Povlsen with his wife Anne
The company started with a single store in the Danish town of Brande, employs 18,000 people and owns brands such as Jack & Jones and Vero Moda.
Povlsen suffered a tragedy when three of his children were killed in the 2019 Sri Lanka terrorist attacks.
According to sources close to him, he believes he can still turn the fate of Asos around while it is listed on the London stock market.
However, things can be taken off his hands in the coming months.
It was reported last week that Alibaba-backed Turkish e-commerce fashion company Trendyol had proposed a £1 billion bid earlier this year.
It came to nothing, but the company’s value has since fallen to just £400m, making it more attractive to a private equity robber or retail rival.
Povlsen’s closest rival is not from Turkey but closer to home in the form of Ashley.
The two men ‘have history’ over the famous Jenners department store in Edinburgh.
Povlsen owns the building, while Ashley owns the brand.
They got into a fight over the signage on the historic department store building.
Ashley increased his stake in Asos to nearly 10 percent last week.
The effect is that “his tanks are placed on Povlsen’s lawn” when a takeover battle ensues. Black said Barker will play kingmaker in any takeover bid.
An outside bid would require 50 percent of shareholders to take control. That would mean getting two of the three largest shareholders on board. It puts Barker at the helm.”