Frasers confirms that it has no plans to make a formal bid for Mulberry

Mike Ashley's Frasers Group has confirmed that it does not intend to make a bid for British luxury brand Mulberry having amassed a 36.8% stake.

Ordinarily when a shareholder's stake exceeds 30% it is obliged to make a formal offer but since Mulberry already has a majority shareholder – in the form of Challice, the investment vehicle for Singapore’s Ong Family, which owns around 56% of the business – Frasers was only bound to clarify its intentions.

Frasers Group, which is the parent of Sports Direct, House of Fraser, Flannels and Jack Wills, first took a stake in Mulberry in February, before it more than doubled its holding to around 29% in November.

Later that same month, it bought a further 4.3m shares at 150p, snapping them up from Icelandic bank Kaupthing, which owned fashion brands Oasis and Warehouse before they collapsed into administration earlier this year.

Frasers also acquired a stake in German luxury brand Hugo Boss this year as it pushes forward with efforts to shift its image to be more upmarket.

Last month Mulberry reported a 29% fall in group sales to £48.9m for the six months to 26 September, alongside a pre-tax loss of £2.4m – down from £10.1m a year ago as it cut costs and boosted online trade.

Sales declines hit 39% in the first quarter before paring back to 18% in the following three months as trading improved.

Mulberry said recent sales in the eight weeks to 21 November fell 19%, with trade hit by retail closures due to the second English lockdown.

The company has been hit hard by the coronavirus pandemic, and in June bosses cut its workforce of 1,500 by a quarter.