Frasers Group has made an £83 million offer to acquire luxury brand Mulberry. The surprise bid aims to stabilise Mulberry, which has faced recent financial challenges.
This development is part of Frasers’ broader strategy to expand into the luxury sector. The takeover bid has significant implications for both companies and the luxury market as a whole.
Frasers Group has proposed an offer of 130p per share, which represents an 11% premium on Mulberry’s recent closing price. Frasers, which owns brands like Flannels and House of Fraser, already holds a 37% stake in Mulberry. The company has positioned itself as a rescuer of British brands, aiming to return Mulberry to profitability.
The company also faced a critical moment when it announced an urgent £10.75 million capital raise to stabilise its balance sheet. This capital raise was underwritten by its majority shareholder, Challice, controlled by billionaire Ong Beng Seng and his wife, Christina.
Mulberry’s shares had dropped to around 100p before recovering slightly to 124p after Frasers revealed its offer. This highlights the volatility and uncertainty surrounding Mulberry’s financial state.
The luxury market has been tough globally, affecting brands like Mulberry. Supply chain disruptions and weaker demand in key markets like China have further impacted sales.
His leadership will be crucial in navigating Mulberry through these turbulent times and potentially under new ownership.
Frasers’ history of rescuing struggling British brands adds another layer of complexity to the potential takeover.
Stakeholders and industry analysts will be closely watching these announcements to gauge the direction of both Mulberry and the broader luxury market.
Frasers aims to avoid a repeat of the “Debenhams situation,” where it lost a £300 million stake following the department store’s collapse in 2019.
The £83 million takeover bid by Frasers Group is a significant move in the luxury sector, aiming to stabilise Mulberry amid financial struggles.
As the situation unfolds, the luxury market will be keenly observing how this potential acquisition will reshape Mulberry’s future and broader market dynamics.
