In the key news on UK stocks, FTSE 100-listed Frasers Group PLC (GB:FRAS) is on the rise today following its multi-year partnership deal with British e-commerce company THG Group PLC (GB:THG). As part of this deal, Mike Ashley’s Frasers Group has acquired THG’s luxury brands business, which includes Coggles. As of writing, FRAS stock has gained over 3%, while THG is trading up by 0.36%.
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Frasers Group was established by billionaire Michael Ashley as a retail company, offering a variety of clothing, sports, and lifestyle products. Meanwhile, THG Group is a UK-based e-commerce company that sells own-brand and third-party cosmetics, dietary supplements, and luxury goods.
Frasers Group’s Partnership with THG
With this acquisition, Frasers aims to further strengthen its premium portfolio. As per THG’s update, its luxury division achieved sales of approximately £43 million in FY23 despite facing challenges within the broader luxury market.
Frasers Group will also leverage THG’s courier management services to enhance the efficiency and performance of Frasers’ Australian fulfilment and logistics operations.
Additionally, through this deal, THG will incorporate Frasers’ customer credit and loyalty platform, Frasers Plus, into THG’s Ingenuity online retail service. This represents the first external partnership for Frasers Plus. On the other hand, the integration will provide benefits to THG’s customers across its various platforms.
Jefferies analyst Andrew Wade praised the deal as a value-adding move for THG Group. Wade also confirmed a Buy rating on THG stock with a forecast of 68% upside potential. THG also maintained its FY24 guidance in its trading update. Overall, THG stock has received a Moderate Buy rating on TipRanks with two Buys and one Hold recommendation. The THG’s average share price of 108.67p implies an upside of 75% over the current share price.
Is Frasers Group a Good Buy?
As per the consensus among analysts on TipRanks, FRAS stock has been assigned a Moderate Buy rating based on one Buy recommendation from Deutsche Numis. The Frasers’ share price target is 1,000p, which is 12% above the current level.
