The Frasers Group PLC (LON: FRAS) share price has fallen 6.35% in the past month despite the company signing multiple strategic partnerships with other firms. The latest deal signed by the firm is the acquisition of an 8.9% stake in Currys, a UK electricals retailer.
eToro is a multi-asset investment platform. The value of your investments may go up or down. Your capital is at risk.
The company, controlled by Mike Ashely and formerly known as Sports Direct, has been busy signing strategic deals with other firms, including acquiring an 18.9% stake in rival AO World, which also deals with electricals and online shopping and delivery.
Top Broker Recommendation
- BlackBull 26,000+ Shares, Options, ETFs, Bonds, and other underlying assets – Read our Review
- Admiral Markets More than 4500 stocks & over 200 ETFs available to invest in – Read our Review
- Hargreaves Lansdown The company's website is easily understandable and accessible to a wide range of customers – Read our Review
- eToro Wide range of instruments available to trade – Read our Review
- IG Top-tier regulation – Read our Review
YOUR CAPITAL IS AT RISK. 76% OF RETAIL CFD ACCOUNTS LOSE MONEY
Frasers noted that the acquisition of a stake in AO World would allow it to benefit from AO's know-how in electricals and delivery. The initial stake was acquired on Monday, 12 June 2023, before the company increased its stake to 21.3%, becoming AO’s biggest shareholder.
The deal-making spree has done little to lift Frasers' share price as investors adopt a cautious approach towards the company and its investments. The UK retail sector remains under significant pressure as consumers cut their discretionary spending amid record-high inflation.
Therefore, there is no guarantee that Mike Ashley’s investments will succeed long-term. The UK retail sector is still uncertain, which explains investors' lacklustre reaction to Frasers' latest deals, which should strengthen the company’s position as a leader in the UK retail sector.
Meanwhile, investors are looking forward to the release of the UK inflation data later this week, which shall shed light on whether inflation is falling or rising in the country. A high inflation reading would pressure the UK retail industry more, while a low one would benefit the industry.
Investors are also looking forward to the Bank of England’s next monetary policy meeting set for Thursday, where the central bank is expected to hike interest rates again, making it difficult for consumers to continue spending large amounts of money on electricals.
*This is not investment advice.
Frasers Group share price.
Frasers Group's share price has fallen 6.35% in the past month despite entering into strategic partnerships.
eToro is a multi-asset investment platform. The value of your investments may go up or down. Your capital is at risk.
