British handbag maker Mulberry recently made headlines after rejecting an £83 million takeover bid from Mike Ashley’s Frasers Group. The luxury brand deemed the offer too low and instead decided to move forward with a planned fundraising effort to support its turnaround.
Mulberry considered the proposal carefully and consulted with its majority shareholder Challice, controlled by Singaporean entrepreneur Christina Ong, who showed no interest in pursuing the potential offer. Frasers Group, which owns various retail brands including Sports Direct and Evans Cycles, currently holds a 36.8% stake in Mulberry.
Despite Frasers Group’s offer of 130p per share, the Mulberry board believes that the recent appointment of Andrea Baldo as chief executive, coupled with a £10.75 million share placing, provides a solid foundation for executing a successful turnaround. The board concluded that the offer did not reflect the company’s future potential value and received confirmation that Challice supports Mulberry’s strategy.
Frasers Group has until 5pm on 28 October to either make a firm offer for Mulberry or walk away, as per a “put up or shut up” deadline. The offer came after Mulberry announced a need for cash following a £34 million pre-tax loss in the year leading up to March, with sales decreasing by 4% to £153 million.
Despite the financial challenges, Mulberry remains committed to its fundraising efforts and will continue engaging with Frasers Group, a significant investor in the company. Andrea Baldo, who took over as chief executive in September, has a track record of turning around fashion brands such as Ganni and Diesel.
Founded in 1971 by Roger Saul and his mother Joan, Mulberry is best known for its high-quality leather goods, particularly women’s handbags. The brand has faced stiff competition in the luxury market and challenges following the end of shopping tax breaks for tourists in the UK post-Brexit.
Overall, Mulberry’s decision to reject the takeover bid signals its confidence in its strategic direction and commitment to achieving long-term success in the competitive retail landscape. With a new chief executive at the helm and ongoing fundraising efforts, the brand remains focused on revitalizing its business and capturing new opportunities in the market.
