Mike Ashley's Frasers Group makes £83m bid for struggling luxury brand Mulberry

Mike Ashley's Frasers Group has made a £83m takeover bid for the the embattled luxury handbag manufacturer Mulberry after the fashion label sounded the alarm bell about its long-term future.

Just last week, Mulberry issued a stark warning that it needed to rustle up some cash, fearing for its sustainability. With a 37% stake already in the company, Frasers Group, home to big names like Sports Direct and Flannels, is eyeing a complete acquisition.

The retail giant said it put forward an approach worth 130p per share, valuing the stake in the company it does not own at £52.4m. This move follows Mulberry’s announcement that it needed cash injection of over £10m this Friday. The luxury fashion firm slumped to a £34.1m pre-tax loss for the year to March 31, compared with a £13.2m profit a year earlier.

The group has experienced a further 18% revenue fall over 25 weeks as high-end spenders tighten their purse strings. In their accounts, Mulberry expressed concerns about the ongoing downturn, highlighting a "material uncertainty, which may cast significant doubt on the group and parent company’s ability to continue as a going concern" if things don't improve.

Against this challenging backdrop, Frasers stated its intentions to take the reins at Mulberry, partly driven by worries over the luxury brand's long-term prospects. 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, founded in Somerset in 1971 by Roger Saul, boasts celebrity fans such as the Princess of Wales and Kate Moss.