In a series of unexpected moves, Frasers Group has increased its investment in Mulberry, the luxury retailer, marking a new chapter in its acquisition efforts.
- Frasers Group purchased an additional 3.93 million shares in Mulberry, following a rejected £83m takeover attempt.
- Mulberry’s fundraising plans were criticised by Frasers Group for a lack of engagement prior to the announcement.
- Ong Beng Seng, Mulberry’s majority owner, faces legal issues in Singapore, adding complexity to the situation.
- Mulberry founder Roger Saul believes LVMH might be a more suitable match for the brand.
In a bid to further its acquisition attempts, Frasers Group has acquired an additional 3.93 million shares in Mulberry, priced at 100 pence each. This move follows the rejection of Frasers Group’s £83 million takeover offer reported earlier, creating a new dynamic in this unfolding corporate saga.
The interaction between the two companies is strained, particularly after Mulberry’s intention to raise £10 million through new shares and a retail offer was made public. Frasers Group expressed its dissatisfaction, citing a “total lack of engagement” before the fundraising announcement. This friction is reminiscent of the situation Frasers Group previously encountered with Debenhams, which ended in administration—a fate they are keen to avoid with Mulberry.
Further complicating the landscape is the legal trouble facing Ong Beng Seng, Mulberry’s majority shareholder. He was charged with obstruction of justice in Singapore, related to a gifting scandal involving the former transport minister. This adds an international angle to the corporate manoeuvrings, potentially affecting stakeholder confidence.
Meanwhile, Roger Saul, the founder of Mulberry, has voiced his opinion on the corporate developments, encouraging a return to the brand’s roots. Saul suggests that LVMH, rather than Frasers Group, would be a more natural partner for the luxury label, indicating a strategic direction that aligns with Mulberry’s foundational ethos.
The recent publication of Mulberry’s financial results highlights a challenging year, with a loss before tax of £34.1 million compared to a £13.2 million profit previously, and a 4% drop in revenue year-over-year to £152.8 million. These figures underscore the pressure on Mulberry’s management to navigate the current business environment effectively.
The increasing stake by Frasers Group in Mulberry amidst ongoing financial and legal challenges signals a pivotal moment for the luxury brand’s future.
