Frasers Group (LON:FRAS) said on Monday it will buy back up to £80 million of stock in a new program aimed at bolstering its stock in the post-Mike Ashley era.
If fully executed, the program will reduce the retail group’s share count by up to 10 million, or 2.2%.
Frasers, whose biggest source of revenue is the UK-based Sports Direct chain, said in December it expects pretax profit of as much as £500M this year, despite a tough macroeconomic backdrop in its home market.
The group has used the cash flows from Sports Direct to expand into more upmarket areas in recent years, not only with the acquisition of House of Fraser but also by accumulating a 34% stake in German fashion brand Hugo Boss (ETR:BOSSn) and buying a portfolio of premium fashion brands from rival JD Sports (LON:JD).
It has also exploited the relative strength of its balance sheet in recent years to scoop up distressed assets in the retail sector that were brought low by the pandemic. These include parts of the Debenhams portfolio in the UK and the Australian retail group MySale.
The Times reported earlier this month that the company is now preparing to make substantial investments in two retail malls in the UK.
Frasers’ shares opened up 2.8% in London in response.