Frasers Group makes bid for struggling Mulberry to avoid ‘another Debenhams situation’

In a statement published on the London Stock Exchange today, Frasers Group confirmed its cash offer for the business values Mulberry at £83m.

The retail giant, owned by tycoon Mike Ashley, already holds an existing 37% stake in the luxury brand.

The takeover bid follows an announcement made by Mulberry on Friday that it was planning to raise £10m in cash to turn around its tumbling balance sheet.

In today’s statement, Frasers criticised Mulberry’s fundraising plans due to not being made aware of them until “immediately prior to its announcement”.

Frasers added that it would have been “willing to underwrite the subscription in its entirety” as a “committed, long-term investor” of the luxury business.

Frasers Group added that it would not accept “another Debenhams situation” that sees another “viable business” fall into administration.

In a statement, Frasers Group 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.

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

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

The news comes after Mulberry’s most recent trading update for the 52 weeks to March 30, 2024, which saw the luxury giant’s pre-tax loss reach £34.1m, down from a pre-tax profit of £13.2m last year.

Revenue for the year was also down by 4% to £152.8m from £159.1m previously as the luxury fashion retailer continues to battle with a slowdown in luxury spending.

Mulberry declined Retail Week’s request for comment.