Frasers Group makes bid for struggling luxury brand Mulberry – TheIndustry.fashion

Frasers Group has made an £83 million takeover bid for struggling handbag maker Mulberry.

The British fashion brand has been hit hard by a downturn in the luxury sector and warned late last week that it would need to raise cash amid concerns about its long-term future.

Frasers Group, which owns Sports Direct and Flannels, already has a 37% stake in the company. It sits behind majority shareholder Chalice, which possesses a 56.14% stake.

The retail giant said it put forward an approach worth 130p per share, valuing the stake in the company it does not own at £52.4 million.

It comes after Mulberry said it needed to raise over £10 million on Friday after slumping to a significant loss for the past year.

The luxury fashion firm slumped to a £34.1 million pre-tax loss for the year to 31 March, compared with a £13.2 million profit a year earlier.

It has warned that sales have dropped more sharply over the spring and summer, with group revenues plunging 18% over the past 25 weeks as wealthy shoppers rein in spending.

Within the accounts, Mulberry cautioned that the downturn has resulted in a “material uncertainty, which may cast significant doubt on the group and parent company’s ability to continue as a going concern” if its struggles continue.

Frasers said it was pushing to take control of Mulberry partly due to these concerns about the long-term viability of the business.

The company said: “We have long been supportive of the brand and commercial opportunities available to the company. With our leading retail expertise and presence, and best in class distribution capability, we believe Frasers to be the best steward for returning Mulberry to profitability.

“Mulberry is facing unabating difficulties. To name a few, rising costs, macro-economic headwinds, and increased selectivity from its discretionary customer base.

“Frasers are exceptionally concerned by the audit opinion in the latest annual report released on Friday 27 September 2024, which notes a “material uncertainty related to going concern”.

“As a 37% shareholder, Frasers will not accept another Debenhams situation where a perfectly viable business is run into administration.”

Mulberry was founded in 1971 in Somerset by Roger Saul and has celebrity fans including the Princess of Wales and Kate Moss.