Mike Ashley has taken a major stake in Burberry as he seeks to expand his luxury retail empire.
The billionaire's Frasers Group disclosed a 4.2pc interest in the struggling trench coat maker on Tuesday worth around £160m.
The purchase will make Frasers, which also owns Sports Direct, Flannels and House of Fraser, Burberry's fifth biggest shareholder.
Burberry, founded in 1856, has struggled recently after an ill-timed attempt to push further into the luxury market coincided with a slowdown in global demand for high-end goods.
Last year it posted a £66m loss and cut 1,700 jobs . Shares in the group are down 16pc so far this year.
However, there have been signs of a recent turnaround, with an unexpected return to sales growth in the three months to June thanks to higher sales of its signature trench coats.
Burberry shares rose 5pc after Mr Ashley's stake emerged, gaining 48p to 1,154p a share. Frasers' shares were up 19.50p to 799p.
Mr Ashley's investment is the latest push by the maverick retailer to get a stronger foothold in luxury retail brands, which helps cement Frasers' relationships with suppliers.
Burberry products are already sold through Flannels, while Frasers has repeatedly signalled ambitions to become a much bigger player in luxury retail.
The Burberry swoop also underlines a drive by Michael Murray, the chief executive of Frasers and also Mr Ashley's son-in-law, to move the company further upmarket.
Frasers owns around 37pc of British luxury brand Mulberry and more than 30pc of German fashion giant Hugo Boss, where it is pursuing a takeover despite opposition from the company's board .
The company has also been linked to a bid for Harvey Nichols, the upmarket British department store chain.
However, Frasers' luxury push has not always gone to plan.
The company bought online luxury retailer Matches in late 2023 but placed the business into administration less than three months later after concluding the turnaround would require too much investment. An investment in Debenhams also turned sour.
Frasers, which was founded by Mr Ashley but has been run by Mr Murray since 2022 , has become one of Britain's most active retail investors through a string of minority stakes.
As well as Hugo Boss and Mulberry, the group has built holdings in a range of retailers including Asos and Boohoo.
Frasers has built its Burberry stake via financial derivatives, which give the company the right to buy shares at a certain price.
Burberry and Frasers declined to comment.
