Mike Ashley's Frasers buys £3m stake in white goods retailer Marks Electrical

Online white goods retailer Marks saw shares move higher in early trading on Tuesday

Mike Ashley's Frasers Group has acquired a £3m stake in Marks Electrical, marking its latest investment deal.

The online white goods retailer saw its shares rise in early trading on Tuesday following the announcement. In a stock market filing, it was revealed that Frasers purchased 6.73 million shares in the business, giving them a 6.4% stake in the Leicester-based retail firm.

However, the majority control of the company remains with founder Mark Smithson, who holds over 70% stake in the business. Earlier this month, Marks Electrical reported lower half-year profits as customers opted for cheaper products due to pressure on their household budgets.

Adjusted earnings fell to £2m for the six months to September 30, down from £2.3m during the same period the previous year. This occurred despite revenues increasing by 9.3% to £58.8m for the half-year.

The investment from Frasers came after Marks shares hit their lowest level since floating in London in 2021 last week. This is the latest acquisition deal by Frasers in the electricals space, having built up approximately a 23% stake in rival AO World in recent years.

A spokesperson for Marks Electrical commented: "The board welcomes Frasers as a shareholder in Marks Electrical. Their investment represents a vote of confidence and also demonstrates the significant upside potential in our business as we focus on building the UK’s leading premium electrical retailer and delivering long term value creation."

The company's shares were 1.3% higher at 51.15p.