Hugo Boss Chairman to Step Down Amid Frasers Group Pressure

Frasers Group, the retail conglomerate led by Mike Ashley, has ousted the chairman of German fashion house Hugo Boss in a bid to gain greater control over the company. The UK-based firm, which also owns Sports Direct, Jack Wills, and Flannels, announced on Monday that Stephan Sturm, the chairman of Hugo Boss' supervisory board, has agreed to step down.

Ashley's firm stated that now is an "appropriate time for an orderly transition" of power, and that Sturm and Frasers have mutually agreed on his resignation as soon as possible, subject to Hugo Boss' constitution. Frasers owns a nearly 48% stake in Hugo Boss and aims to increase its holding above 50%. The company launched a £1.7bn bid for the entire company in June, but it was rejected by the board.

Frasers then appealed to Hugo Boss' shareholders, acquiring about 17% of the company through an €38-per-share offer, bringing its stake to nearly €1.5bn (£1.27bn). The group plans to nominate Robert Palmer, a former Frasers company secretary, to Hugo Boss' supervisory board. Sturm was appointed chairman of Hugo Boss' supervisory board in May last year, with his term set to run until the end of the decade.

As part of the two-tier system prevalent in German companies, Hugo Boss' supervisory board oversees the managing board, appointing its members. Sturm has held board positions at healthcare firm Fresnius, airline Lufthansa, and the Heinz Herman Thiele foundation, the controlling shareholder of manufacturing giant Knorr-Bremse. The London-listed firm's pursuit of Hugo Boss is part of Mike Ashley's strategy to expand into the high-end fashion market.

Frasers Group, known for its aggressive takeover tactics, recently acquired struggling department store chain Harvey Nichols to bolster the visibility of its luxury label, Flannels. The company has a history of increasing its stakes in rival firms but has failed to secure board seats in Mulberry and Boohoo. Earlier this year, Ashley initiated a £166m takeover bid for Australian shoe company Accent and called for the removal of its chairman due to alleged "poor performance."