Mike Ashley’s Frasers Group has loosened its grip on Burberry, despite ramping up its pursuit of high-fashion names.

The retail giant, which owns Sports Direct and Flannels, had built up a position in Burberry over recent weeks but has now faltered in its pursuit of the group. 

Frasers Group had increased its position in Burberry up to 7.4 per cent as recently as last week. The stake is held through put options, meaning that Frasers has the right to sell them at a fixed price.

But Mike Ashley looks to have begun his retreat from the FTSE 100 fashion house, with recent filings showing Frasers’ position in the group was slimmed down to six per cent.

Burberry is worth more than £3.8bn, meaning Frasers Group’s holding in the company is still worth about £240m. Ashley’s firm first took a 4.2 per cent stake in the group in July.

The British fashion house is in the midst of a turnaround under chief executive Joshua Schulman, who is attempting to reposition the group in the mid-market after a short-lived foray into ultra-high fashion. 

The group has cut thousands of jobs in recent years but has more recently shown signs of recovery, posting a five per cent jump in revenue in the three months to July.

Ashley’s pursuit of Burberry has been part of the retail tycoon’s attempts to push his fashion empire upmarket in recent months. 

These efforts had been endorsed by Schulman, who recently praised Flannels for “bring[ing] the energy of a fashion capital to key regional cities, giving more customers the opportunity to buy a Burberry trench coat in their home town”. 

Frasers Group bought luxury department store chain Harvey Nichols out of administration for £40m earlier this year, and has said it will use its new acquisition to scale up its Flannels brand.

The retail group has also been in pursuit of Hugo Boss. It holds about 48 per cent of the German fashion house and has told shareholders it wants majority control of the group. 

Last month Michael Murray, Frasers’s chief executive and Ashley’s son-in-law, was appointed chairman of Hugo Boss’ supervisory board after its previous boss stepped away due to “recent changes in the company’s shareholder structure”. 

Frasers had been tightening its grip on Hugo Boss over the summer, hoovering up positions in the company directly from shareholders after the group slapped down its “inadequate” takeover proposal.