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Mike Ashley’s Frasers Group has made an £83 million takeover bid for struggling handbag maker Mulberry.
The Somerset 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 owns a 37% stake in the company.
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.
Frasers Group founder Mike Ashley (Yui Mok/PA)PA ArchiveIt 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 March 31, 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.
Mulberry said it is focusing on reducing its carbon footprint with a low-carbon collection. (Mulberry / PA)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: “Frasers are exceptionally concerned by the audit opinion in the latest annual report released on Friday September 27 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.
