Frasers Group bids £83m for Mulberry handbag maker

In the U.K., Frasers Group has made a non-binding bid for luxury handbag maker Mulberry, valuing the company at approximately $111 million. This move follows Mulberry's announcement of a capital raise due to poor sales, which included a $14.4 million share placement to improve its financial standing. The luxury brand reported a significant pre-tax loss of $45.6 million for the year ending March, contrasting with a profit of $17.4 million the previous year, as sales declined by 4%. Furthermore, sales dropped by 18% in the subsequent 25 weeks, prompting concerns about the company's viability. Frasers Group, which already holds a 37% stake in Mulberry, expressed frustration over the lack of communication regarding the capital raise. The company emphasized its retail expertise and commitment to returning Mulberry to profitability, stating it would not tolerate a situation similar to the collapse of Debenhams, which affected many shareholders. The majority shareholder, Challice, controlled by Christina Ong, has pledged to support the share placement, indicating ongoing backing for Mulberry's new CEO, Andrea Baldo. Frasers has until October 28 to make a firm offer or withdraw, as the luxury market faces increasing competition and challenges. The situation highlights the precarious state of Mulberry and the strategic interests of Frasers Group in the evolving retail landscape. Investors are becoming impatient as Mulberry's shares have significantly declined over the past year, raising questions about its future prospects.