Frasers Group has informed Hugo Boss that it will vote against any future dividend payments, after increasingly growing its stake in the luxury fashion firm.

Frasers Group argued that the retailer should prioritise growing its market valuation over returning money to shareholders, and considers its shares to be undervalued.

The property group said: “Frasers Group does not agree with Hugo Boss’s current dividend policy and believes Hugo Boss should not pay any dividend at this time.

“The retained cash could then be used by Hugo Boss for other value-enhancing measures within the business which would better support Hugo Boss’s long-term growth and financial flexibility. Therefore, if necessary, Frasers group intends to vote against any proposed dividend.”

The warning follows 99.94% of voters supporting a dividend of €1.40 (£2.21) per share for the 2024 financial year in Hugo Boss’s annual meeting in May.

It comes after Frasers Group has been increasingly exerting its influence over Hugo Boss in recent times. In May, Frasers CEO Michael Murray joined Hugo Boss’s supervisory board, after upping its stake in the retailer to £415m in July 2024.

Hugo Boss said that it “acknowledges the perspectives shared by Frasers Group and appreciates their continued engagement.

“We maintain an active and constructive dialogue with all our shareholders, seeking and valuing their views as we strive for meaningful shareholder value creation.”

It noted that its “existing capital allocation approach reflects a balance between growth investments and shareholder participation”.

The retailer added that its board had initiated a strategy which would focus on profitable growth.

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