Frasers To Vote Against Hugo Boss Dividends After Amassing Big Stake

German fashion house Hugo Boss has been warned by activist shareholder Frasers Group that it will vote against any dividends, as the U.K. retail group founded and owned by billionaire Mike Ashley steps up pressure on the company’s management.

The non-nonsense retail tycoon has been an outspoken critic of a number of retail chains and brands in which he has built a stake and while Hugo Boss responded positively, it will be aware that Ashley rarely backs down once he starts on such a path.

Although Ashley is still backing the incumbent team, instead of dividend payouts Hugo Boss’s leadership should prioritize funding long-term growth and financial flexibility, Frasers said in a statement issued late last week.

In the release it claimed that the company’s stock is currently undervalued and it called on Hugo Boss to redeem all its treasury shares.

The stock value of Hugo Boss has ticked up 5% higher since the release, and now sit at around the same level as 12 months ago.

Frasers and Hugo Boss have a long and established relationship that includes the U.K. retailer selling the fashion brand’s stock across its multi-fascia store chains and online. Ashley’s company has a holding in the business that has grown to 25% of voting rights, according to a filing last month, with exposure to a further 32% through the sale of put options.

Frasers stressed that it will continue to support Hugo Boss Chief Executive Officer Daniel Grieder and Stephan Sturm, Chairman of its supervisory board, in growing the fashion brand. It also said it had not ruled out adding to its interests in the company over the next year, subject to market conditions.

Frasers Builds Hugo Boss Stake

Frasers has a reputation for growing large stakes in other retailers and has accumulated multiple brands and retail groups over the years as it has expanded into a powerful European business. Hugo Boss will also be more than aware that Frasers has often used its holdings in businesses to influence decisions at board level, or turn up the heat as with Mulberry, and Frasers Chief Executive Officer Michael Murray, who is also Ashley’s son-in-law, recently joined the brand’s supervisory board.

In its own statement, Hugo Boss responded that it maintains an “active and constructive” dialog with all shareholders, and appreciated the engagement with Frasers.

The company will outline a new strategy at a capital markets day in the fourth quarter and Hugo Boss also said that while it had not previously seen any downside in keeping 1.4 million treasury shares acquired between 2004 and 2007, it is now considering redeeming them as Frasers requested.

In its most recent results for its first quarter, published May, Hugo Boss said that currency-adjusted revenues in EMEA (–1%) and the Americas (–1%) declined slightly; Asia/Pacific (–8%) had been impacted by ongoing subdued consumer demand in China.

The digital business continued to grow (+4%), partially offsetting revenue declines in both brick-and-mortar retail (–4%) and brick-and-mortar wholesale (–3%).

For its full-year 2025 outlook Hugo Boss said it expected sales to remain broadly stable (–2% to +2%), while it pointed to brand and product initiatives, including the global launch of its first Boss collection co-designed with David Beckham in April.

Hugo Boss And Beckham Factor

“Following a strong finish to 2024, our performance in the first quarter of 2025 was affected by the rising macroeconomic uncertainty, which impacted global consumer sentiment and our industry. Against this backdrop, we continued to place strong emphasis on what we have in our control,” CEO Grieder said.

“We further advanced our most impactful strategic initiatives, such as our Boss One bodywear campaign with David Beckham, to further strengthen the relevance of Boss and Hugo. At the same time, we continued to realize cost efficiencies across important areas of our business, optimizing our global sourcing activities and unlocking further productivity gains. Altogether, these efforts supported our top- and bottom-line development in the first quarter.”

In the same month Hugo Boss also successfully established a commercial paper (CP) program, enabling the group to issue short-term, unsecured notes in an aggregate amount of up to circa $585 million, expanding its access to capital markets beyond traditional bank financing.

The CP program allows Hugo Boss to issue notes in various currencies, and the funds raised are intended for general corporate purposes.