On Friday, Frasers Group bought another 198,666 Hugo Boss shares for 7.63 million euros. That isn't much money by deal standards, but it took Mike Ashley's company past half of the German suit maker. The takeover offer fell short in the summer, so they kept buying until they had control anyway. Welcome to a Saturday edition of Fashion Business Daily. Three stories: Hugo Boss becomes a Frasers subsidiary; Reuters reports that Shein will pay 100 million dollars to settle a US Federal Trade Commission investigation; and Zegna, which posted the growth in China that nobody else in luxury could find this month. One tap on follow, and we'll be back in your ears before you know it.
Maddie Parker and Sonja Wind, reporting for Bloomberg in a story carried by The Business of Fashion:
Frasers Group Plc said it’s taken control of Hugo Boss AG, pushing its stake above 50 percent in a move that will turn the German apparel brand into a subsidiary of UK billionaire Mike Ashley’s retail empire.
This is from Frasers' own statement, released late on Friday. FashionNetwork has the details. The new shares take the holding to 50.08 percent, up from about 48, and Frasers paid for them out of existing cash. On top of that, Frasers has interests in up to another 21.87 percent through put options it has sold. So 50 percent might not be where this stops. Maybe not. In June, Frasers offered 38 euros a share. Boss told shareholders to reject it, saying it undervalued the company, and it stopped its share buyback early. BoF says that closed off one way Frasers could have passed 50 percent without buying any more shares. The offer didn't get Frasers a majority. Then in September, Frasers chief executive Michael Murray, who is also Ashley's son-in-law, was named chairman of Hugo Boss, and supervisory board chairman Stephan Sturm left. Some investors were already worried about board independence. Now the buyer's CEO chairs the board of the company it just took over. Frasers says Boss's earnings, assets and liabilities are expected to be consolidated into its own, and it gives an unaudited, illustrative pro forma EBITDA for the two businesses combined of just over 1.874 billion euros. That's Frasers' own number. And what are they actually getting? Boss makes expensive suits and underwear, and it's on its second turnaround plan under CEO Daniel Grieder. Frasers also holds stakes in Mulberry and Burberry, and it bought Harvey Nichols out of administration in August. The company behind Sports Direct now controls a German tailoring brand, and nobody has explained what it plans to do with it. Frasers wouldn't comment on its plans beyond the statement. In September, Murray said he saw significant untapped potential in Boss. A Hugo Boss spokesperson told Bloomberg that the bigger stake doesn't significantly change Frasers' influence or the company's daily operations. We looked at Murray's intentions for Boss on October 5. As of Friday, Frasers owns a majority.
Helen Reid and Jody Godoy, reporting for Reuters:
Consumers filed more than 12,000 complaints about Shein over more than $11 million in purchases between January 2020 and June 2026, according to FTC records reviewed by Reuters.
Here's where this stands. The 100 million dollar figure comes from a source with direct knowledge, speaking to Reuters on Friday. Shein told Reuters it had reached, quote, a constructive outcome with the FTC, and said more details would follow. The FTC declined to comment. So the settlement terms haven't been published yet. Reuters calculates the payment at 44 percent of Shein's second-quarter profit. And the complaints are about the basics. According to Reuters, customers told the FTC and the Better Business Bureau that packages Shein had marked as delivered never showed up, and customer service didn't sort it out. Seems like a fair thing to complain about. To be fair to Shein, Reuters says it couldn't independently verify those complaints or find out whether they were resolved. The money wasn't a surprise, either. Shein warned in its July filings for the Hong Kong listing that the US investigation could lead to significant fines. For scale, Fashion Nova was fined 9.3 million in 2020 over shipping promises.And there's more coming from Europe. Reuters says Shein shares are down 22 percent from their September 1 listing price, as investors worked out how much the EU's three-euro fee on low-value parcels has hurt the business there. From November 1, the EU adds another two-euro handling fee, which makes the total five euros per separate customs code. Mike Ryan of Smarter Ecommerce told Reuters the way these tariffs are implemented is, quote, extra punishing for Shein. That's why Sky Xu said last month that Shein would build more higher-priced brands. The five-dollar dress was always a customs loophole as much as a product, and the loopholes are closing. And there's still a European Commission investigation into illegal products on its marketplace. This bill may not be the last.
Chiara Beghelli, writing in Il Sole 24 Ore, on the Zegna group's numbers:
Growth was solid, as mentioned, across all geographical areas, including China: whilst the Americas continued to see double-digit growth (+13.6 per cent), and plans are in place to open a Salotto Zegna within the flagship store on Fifth Avenue in New York, it is above all the Chinese market that is shining, recording growth of 5.7 per cent – a figure rarely seen in recent sector reports.
Zegna reported on Thursday, the same day as Kering and Prada, and we didn't have room for it in Friday's episode. These are the group's own figures. Nine-month revenue was 1.42 billion euros, up 7.2 percent, or 8.9 percent organic. The Impression has third-quarter revenue at 433.8 million euros, up 8.2 percent organic. Il Sole says the shares were up more than 6 percent midway through the New York session. Hold on. Gucci is down 6, Hermès says China is very difficult, Prada says the malls are emptier, and a menswear house is growing in China? According to its own numbers, yes. One caution: the two outlets slice it differently. Il Sole gives China at 5.7 percent. The Impression has Greater China up 8.7 percent in the quarter and 6.6 percent over nine months. Whichever figure you use, it's positive, and that's unusual this season. And it's coming from one brand. The Zegna label did 918.4 million over nine months, up 12 percent, and 13.8 percent in the quarter. Executive chairman Gildo Zegna says the brand's own stores grew 16 percent organic. The other two brands are a different picture. Per The Impression, Tom Ford Fashion grew 5.4 percent in the quarter to 69.6 million, under Haider Ackermann. Thom Browne fell 5.9 percent to 45.4 million, hurt by weaker demand in Greater China and wholesale cuts. Direct-to-consumer is now 85 percent of branded revenue, up from 82. So Thom Browne is going through the same thing as everyone else in China, and the Zegna brand isn't. Same owner, same country, opposite results. That tells me it's the product and the client service doing it. That's a reasonable reading, though it's yours, not the company's. Of everyone who reported last week, the business that grew fastest was the quietest one, selling mostly through its own stores.
We'd like to hear from you. If you buy Boss for a wholesale account, or you sell Zegna on the shop floor, and what we said doesn't match what you're seeing, write to fashionbusinessdaily at lantern podcasts dot com.
My bet: Kering names at least one designer before we're back. If it happens, we'll tell you exactly what was confirmed. That's Fashion Business Daily for this week, a Lantern Podcast. Our next episode is Monday, October 26.