One of the great retail mysteries became even more puzzling this past week with the completion of further deals involving the acquisition outright, or the purchase of a shareholdings in troubled retail businesses by Frasers Group.

Under the guidance of its founder Mike Ashley the company has recently bought sizeable shareholdings in Boohoo, Currys and AO as well as adding to the stake in Asos, which further expands the portfolio of brands linked to the business.

The value of these investments has been calculated at around £500 million and includes a feast of recognised retail names. Among the retailers it has bought outright are: Game, House of Fraser, Gives & Hawkes, Jack Wills, Amara and Sofa.com. And included in the retailers in which it holds shareholdings are: Hugo Boss, N Brown, Mulberry and the recent purchases such as Asos and AO.

What links all these deals is that the assets have either been distressed or there is a belief they are undervalued. Unlike some of the examples in the past of retailers building up a house of brands-type business through deals that stretched resources and built up debts the Frasers Group strategy involves buying lowly-valued brands funded through the company’s healthy balance sheet.

Certainly among investors and City analysts there is a positive consensus that Ashley has acted opportunistically and targeted troubled assets. But what continues to worry many of these parties is that the company typically fails to give much indication of the strategic rationale behind the individual transactions.

What has added fuel to the accusations of a scatter-gun approach to the deal-making is the history Ashley has with gambling in casinos and buying stakes in retailers in the past as simple trades in which to potentially make a profit. The most recent example of this is with clothing retailer Next where a stake was purchased last year and sold at a profit some months later.

Since taking over from Ashley as CEO of Frasers Group, Michael Murray has undoubtedly sought to dispel the view that the deals are simply Ashley-driven trades. The deals with Hugo Boss and Flannels for instance have helped the company move into higher price-points while the stakes in Asos and Boohoo comply with its stated aim of pushing into young fashion. Others deals have been undertaken to bring specific skills into the Frasers Group such as expertise in selling goods on credit and tap into certain fulfilment capabilities. 

Despite the ongoing puzzlement for many around the deal frenzy at Frasers Group there is no disputing the fact it has not negatively affected the company’s strong trading compared with many other retailers over recent years. And over time many of the deals could well be performance-enhancing for the group.