Frasers Group’s position in the FTSE 100 is under threat as its shares continue to decline due to ongoing tensions with Boohoo Group.
- Shares have dropped over 10% in three months, setting a course for a likely move to the FTSE 250.
- Frasers has called for Boohoo to replace its chair, adding to market pressures.
- B&M is also seeing a downturn, with a share drop of 21% and lower operating profits reported.
- Market volatility poses ongoing challenges for retailers within the FTSE index.
Frasers Group is facing potential exclusion from the prestigious FTSE 100 index owing to a significant dip in its share value. The company’s stock has experienced a decline of more than 10% over the past quarter. This downturn is largely attributed to its persistent public disputes with the Boohoo Group.
The retail heavyweight, known for its ownership of Sports Direct, has re-entered the FTSE 100 only recently in 2022 after a six-year hiatus. However, recent developments have positioned it on the brink of demotion to the FTSE 250. This anticipated action is part of the routine quarterly reshuffle of the index constituents.
Central to Frasers’ current market challenges is its clash with Boohoo Group, concerning management and strategic direction. Frasers, which controls a 27% stake in Boohoo, has publicly advocated for the removal of Boohoo’s chair, Mahmud Kamani, in a strongly-worded open letter, escalating tensions. The call for change was paired with a declaration that the ‘chaos at Boohoo must end’, resulting in a further 5% drop in Frasers’ share price.
In parallel, the financial performance of B&M, another major player in the retail sector, has also been under pressure. With shares falling by 21% in the same period, B&M’s current market capitalisation stands at £3.4 billion. Their recent financial report highlighted a 1.8% fall in adjusted operating profits attributed to increased costs from expanding store locations and supply chain investments in France.
Such stock performances underline the broader volatility affecting UK retailers listed on the FTSE, driven by both market dynamics and individual corporate challenges.
The impending reshuffle of the FTSE indices underscores the impact of strategic misalignments and market pressures on UK retail giants.
