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Mike Ashley’s Frasers Group has made a takeover approach for luxury handbag maker Mulberry, adding it was “exceptionally concerned” about the fashion brand’s future.<\/p>\n
Mulberry’s sales have fallen sharply following a downturn in the luxury sector, and last week it announced plans to raise nearly \u00a311m to bolster its finances.<\/p>\n
Frasers Group, which owns several retailers including Sports Direct and Flannels, already holds a 37% stake in Mulberry and its proposed offer values the firm at \u00a383m.<\/p>\n
Frasers added it wanted to avoid “another Debenhams situation” – referring to the department store chain that collapsed in 2019.<\/p>\n<\/div>\n
As it made its offer, Frasers said it had only been made aware of Mulberry’s plan to raise additional funds \u201cimmediately prior to its announcement\u201d.<\/p>\n
“Given this total lack of engagement, we believe the status quo to be an untenable position for Frasers and the other minority holders of Mulberry shares,” it said.<\/p>\n
Frasers said it was “exceptionally concerned” at an opinion by Mulberry’s auditor in its annual report, published on Friday, which noted there was “material uncertainty related to going concern”.<\/p>\n
It said: “As a 37% shareholder, Frasers will not accept another Debenhams situation where a perfectly viable business is run into administration.”<\/p>\n
Debenhams, in which Frasers held a stake, went into administration in 2019<\/a> after several years of falling sales, with the Covid pandemic being the final blow.<\/p>\n Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: “Mike Ashley\u2019s frustration with Mulberry is plain to see.<\/p>\n “Keeping it quiet indicates that the [Mulberry] board didn\u2019t want to give Frasers the early option of owning an even bigger chunk of the company. <\/p>\n “However, investors may also be losing patience, given that Mulberry\u2019s shares have fallen by 52% over the past year.”<\/p>\n Ms Streeter said Frasers Group had already taken steps to “move upmarket”, such as increasing its stake in Hugo Boss.<\/p>\n