Recent developments have sparked discussions around Mulberry’s strategic direction.
- Founder Roger Saul suggests a potential alignment with LVMH as ideal.
- Mulberry rebuffs Frasers Group’s £83m takeover proposal citing undervaluation.
- The company has struggled due to over-reliance on handbag sales.
- Saul remarks on the high costs of building a luxury brand from scratch.
Recent events have brought Mulberry’s strategic future into the spotlight. Founder Roger Saul has voiced that a partnership with a prominent luxury entity such as LVMH would better align with Mulberry’s brand ethos in contrast to the recent takeover bid by Frasers Group.
Mulberry’s board has decided to reject an £83 million offer from Frasers Group. This bid, which was set at 130p per share, was regarded as undervaluing the company’s potential, notwithstanding being a 30% premium on recent share prices.
Over the years, Mulberry has faced difficulties largely attributed to its dependence on handbag sales, a point acknowledged by Saul. He advocates for a return to the brand’s foundational spirit to revitalise its market position.
Saul commented on Frasers Group’s bid, acknowledging Mike Ashley as a capable retailer but emphasised that the move has instigated a challenging battle for Mulberry. He highlighted the massive financial investment required to develop a brand akin to LVMH, stating it would cost “hundreds of millions of pounds” to establish a similar presence from scratch.
The unfolding situation at Mulberry reflects broader challenges in luxury retail, emphasising the need for strategic repositioning.
