Mike Ashley’s Frasers Group buys 12.5 % stake in Mulberry

By guest author Elias Jahshan from Retail Gazette

Mike Ashley’s Frasers Group has bought a 12.5 % stake in luxury British handbag retailer Mulberry, the company has revealed.

Caption courtesy by Retail Gazette

Frasers Group – previously known as Sports Direct – provided no detail on how much was paid, but based on Monday’s share price the stake is worth almost GBP 19 million.

Ashley has been keen to grow his high street operations and turn to more upmarket products through the rolling out of his Flannels stores, which sells luxury clothes.

He had already been speaking to Mulberry – where a bag can cost GBP 1295 – for several months because the fashion house’s products are sold in House of Fraser stores.

However, sources close to Mulberry told PA Wires that the company was unaware of Ashley’s investment plans.

In a short statement, Frasers Group said it was “pleased to announce that it has acquired a 12.5 % economic interest in Mulberry Group plc. Mulberry is a global luxury brand with a rich British heritage.

“A key strategic priority for Frasers Group is the elevation of our retail proposition and building stronger relationships with premium third-party brands.

“Frasers Group looks forward to working more closely with Mulberry for the benefit of shareholders of both companies.”

On January 31, 2020, Hong-Kong investment group Tybourne sold its entire 11 % stake in the business, which Frasers Group is likely to have bought in the deal – although the company would not confirm it.

Ashley has made several major investments in high street rivals in recent years, and has been battling with the government to overhaul business rates.

Investments in the past have included JD Sports, Tesco, French Connection and Debenhams – but not all have led to success.

More successful have been his takeovers of Evans Cycles, Game Digital, Sofa.com, Jack Wills and House of Fraser.

Mulberry has been struggling financially, with bosses warning that the UK market remains tough and heavy discounting is hitting profits.

In November, the retailer said it recorded a GBP 9.9 million pre-tax loss for the six months to September 28, 2019.