FTSE 100 retail group Frasers (FRAS) has its fingers in more pies than Pukka serves up at a Rotherham United football match. Over the past few weeks, it has unveiled investments in yet more listed retail companies. Before you think it has gone wild, there is method in its madness.

In recent years, Frasers has tried to shake off its image as a ‘pile ‘em high, sell ‘em cheap’ type of business. Mike Ashley has passed the CEO baton to his son-in-law, Michael Murray, who has focused on expanding the group’s upmarket interests. He has led investments in more luxury stores and focused on premium products under the Flannels brand.

While that has given a new lease of life to the group, it is important not to forget its roots lie elsewhere. Frasers cracked the formula for filling stores from floor to ceiling with products at low prices via Sports Direct, and Ashley spent years picking at the bones of failed retailers to add new strands to the group.

He is an expert at picking up a bargain, be it buying a business on the cheap, striking good property deals or investing in unloved companies for strategic gains. Once again, it looks as if Ashley has downed a can of Red Bull and spotted new opportunities.

While he no longer runs Frasers, he remains the biggest shareholder owning just over 70% of the business.

Ashley has previously implied that he did not get the luxury goods side of Frasers, leaving it to Murray to pursue. Instead, his bread and butter are mass-market retail businesses.

Frasers taking stakes in AO (AO.) and Currys (CURY) effectively provides a foot in the door for the electronics sector. It already had a position in the computer games industry by owning GAME but becoming a major shareholder in AO and Currys should give Frasers a broader understanding of the challenges around selling tech hardware.

AO is also an expert at moving goods from A to B – something increasingly important to Frasers as more people order bulky products such as exercise machines from Sports Direct and furniture via its Sofa.com business.

Taking stakes in ASOS (ASC) and Boohoo (BOO:AIM) makes sense. Athleisure is increasingly fashionable, but the products in Sports Direct stores are too samey. If you do not like second-tier brands including Slazenger, Firetrap, Puma and Everlast, you are unlikely to want to kit out your wardrobe in Sports Direct shops. However, there is scope to broaden the range and make it more of a destination for shoppers.

Adding brands is the way forward, just like Frasers did with the purchase of Jack Wills in 2019. I am sure ASOS and Boohoo could offer suggestions.

Do not expect takeovers. Frasers prefers to buy businesses out of administration and none of its recent investee companies are in serious financial trouble. Instead, being a major shareholder should be enough to get Ashley an audience with the board of directors where he can prize out all the valuable information and feed that into Frasers’ own brain machine. It is an expensive gamble to get this boardroom access, but Ashley clearly thinks it is worth it.

I am surprised he has not made a similar move with a footwear retailer, given the obvious cross-over with Sports Direct. Is that next on the list?

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