Will Hugo Boss be a smart addition to the Frasers portfolio?

Frasers Group, the retail company that owns the eponymous department store chain, Sports Direct, and a raft of other high street brands, has made a £1.7bn bid for Hugo Boss. Mike Ashley’s group, which already owns a quarter of the German menswear brand, saw shares jump shortly after making the bid.

YouGov BrandIndex data may be able to partially explain why markets have responded favourably to the bid. Frasers performs well in several areas when it comes to public perception, but Hugo Boss outperforms its would-be acquirer in nearly all of them (with the exception of Consideration scores, which are at 6.3 for both).

Impression scores, a measure of general likeability, are at 12.4 higher than Frasers’ 7.3. And while it’s perhaps not surprising that a designer brand enjoys positive Quality scores (Hugo Boss 27.8; Frasers 15.4), it also beats Mike Ashley’s group on Value (8.4 vs. -1).

Other areas where Hugo Boss’s cachet could improve Frasers’ include Reputation scores, which measure whether consumers would be proud or embarrassed to work at a brand (20.7 vs. 9.0). Consumers are also more likely to recommend the German fashion brand (7.3 vs. 5.2). Perhaps summarising the brand’s appeal, Index scores – a measure of brand health that averages several metrics – are 11.0 compared to a score of 6.3 for Frasers.

The approach for Hugo Boss was not coordinated with the fashion brand’s board, and the takeover is not yet certain or complete. But should the acquisition go through, it will represent an outlier in Mike Ashley’s group in a few different respects. One is that it will be one of the oldest and most storied entities in the Frasers portfolio. Another is that, while Frasers is known for purchasing brands that have fallen on hard times, Hugo Boss is a profit-making exception (generating some €4.3bn in sales last year). And in terms of public perception, our data shows that Hugo Boss may also provide some ballast for Frasers’ image among UK consumers.

This article originally appeared in City AM

Image: Getty