Frasers Group to shed light on consumer demand ahead of key Christmas period

Mike Ashley’s Frasers Group will be hoping to reveal resilient demand from shoppers despite pressure on budgets, as it faces the potential prospect of being demoted from the FTSE 100.

Frasers Group, which owns the Sports Direct, Flannels and Frasers brands, will update investors on its performance over the past six months on Thursday December 5.

It comes after a busy few months for the group, largely linked to the raft of retailers it holds investments in.

Shareholders will be keen for an update over its strategy for these businesses, with the group seeking to grow its control in a number of these brands recently.

Frasers is currently embroiled in a war of words with Boohoo – the online retail giant it owns a 27% stake in – over its leadership.

Mr Ashley has sought to be appointed as Boohoo’s chief executive, suggesting he can turn around the group’s fortunes after a period of slumping sales in the face of weak demand and fierce competition from Asian rivals Shein and Temu.

The group also owns a major stake in handbag maker Mulberry and attempted to snap up the entire business for £111 million.

However, the move was ditched after Mulberry’s majority shareholder, Challice, pushed back against the deal.

Nevertheless, the group’s stakes in Mulberry and Hugo Boss highlight its recent “elevation” strategy, which has seen it boost profitability and sales through growing its premium operations.

Higher-end products have however come under pressure in recent months as shoppers have been hit by higher mortgage and rental costs.

Shareholders will be keen for Frasers to shed light on how the strategy is performing given the challenges in the market, as well as a broader insight into consumer sentiment.

Rival JD Sports warned over profits last month after reporting a slump in sales in October, as mild weather impacted sales of jackets and coats.

Aarin Chiekrie, equity analyst at Hargreaves Lansdown, said: “There should also be early insight into how trading’s fared in the run-up to the important Christmas period.

“Frasers, with its high brick-and-mortar exposure, relies heavily on shoppers heading to the high street, so it’s more vulnerable than most if there’s any pullback in footfall.”

Shares in Frasers have dropped back slightly in recent months over wider concerns about the retail sector amid reports of weakness in demand through autumn.

This has therefore meant that Frasers is at risk of falling out of the FTSE 100 index of the UK’s biggest publicly-listed firms.

Next week, FTSE Russell will confirm which firms will leave and enter the index, as well as the FTSE 250, on the basis of their share performance.

Frasers shares have fallen by more than 10% in the past six months, largely due to worries over consumer spending, and is therefore predicted to drop into the FTSE 250.

Elsewhere, fellow retailer B&M European Value Retail is also likely to face relegation due to similar concerns.

However, Warhammer firm Games Workshop has had much stronger fortunes and could rise into the FTSE 100 after a profit upgrade helped push its shares higher earlier this month. The Nottingham-based business is now worth around £4.5 billion.