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The Flannels and Sports Direct owner revealed in a bourse statement Boohoo is an “attractive proposition to us with its laser focus on young female consumers.”

Frasers Group added: “We see potential synergies and an opportunity to strengthen our own brand proposition in collaboration with Boohoo, most obviously with Frasers Group brands I Saw It First and Missguided.

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“Driving growth through strategic investments is a core part of Frasers’ DNA. Under Michael Murray’s leadership, we continue to build on our long track record of establishing supportive shareholder positions in attractive retail companies. We have a clear strategy to identify opportunities to invest in businesses which complement our existing sport, premium and luxury businesses, or help us to build and further utilise our sector-leading ecosystem.”

Last month Frasers Group increased its stake in Asos from 5% to 7.5%.

Commenting on the news, Louise Deglise-Favre, apparel analyst at GlobalData, said: “Frasers’ acquisition of a 5% share of the Boohoo Group, coupled with a recent increase in its ASOS stake appears part of a strategy to invest in “struggling” UK online fast-fashion players. While both Boohoo and Asos’ sales are much higher than pre-pandemic, their recent disappointing performances have caused share prices to slump. For Frasers Group, the lower price means it can strengthen its position within the UK fashion landscape at a relatively low cost.

“Boohoo’s recent struggles can be attributed, in part, to a general slowdown of the online fashion retail category following outstanding growth during the pandemic. But as this category returns to growth in the coming years, the Boohoo group should see its performances improve and, as a result, its share price, which will benefit Frasers in the long term.”

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Last month Boohoo found itself at the centre of headlines after it was reported to have been demanding a 10% discount from its suppliers in a move aimed at cutting costs.

Meanwhile, Frasers Group struck a venture agreement with subsidiary Frasers Asia Sdn Bhd and Pt MAP Active Indonesia, to introduce Sports Direct’s stores across Indonesia with both wholesale and retail components.

Frasers Group Asia MD Paul Gibbons said: “The Indonesian market offers an exciting opportunity to highlight our brands to the fourth largest population in the world. We enter this partnership with a long-term view to build the best multi-sport destination which has been a great success in the UK.”