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Frasers Group ups its stake in Mulberry to just under 30%

Lauretta Roberts
03 November 2020

Frasers Group has today more than doubled its stake in British luxury accessories house Mulberry to just under 30%.

Mike Ashley's retail group, parent of House of Fraser, Flannels and Sports Direct, paid £19m for a 12.5% stake in Mulberry in February in what it described as part of its "strategic priority" to build closer relationships with premium third party brands.

After today's transaction its stake in the brand now sits at 29.7% just under the 30% threshold, which, under Stock Market rules, would obliged it to make an offer for the entire business.

It is not unusual for Ashley to position his company's holdings in third party brands at this level. He has done the same with French Connection and while Debenhams was listed, he also held a near 30% stake, which was wiped out when the business was delisted and bought in a pre-pack administration by its investors last year.

The latest buy further proves Frasers' determination to capitalise on opportunities that arise from the COVID-19 crisis. The group is said to be in the running to buy the heritage fashion brands, Jaeger and Austin Reed, that form part of the struggling Edinburgh Woollen Mill Group and it is circling Debenhams, which is currently in administration.

Like many, Mulberry has been hit hard by the COVID-19 pandemic and its share price has been on a downward trajectory this year. It began the year with shares priced at around 285p and they closed today at 152p.

Frasers appears to have snapped up shares disposed of by Icelandic bank Kaupthing today. Kaupthing had previously held a near 25% stake in Mulberry, which it reduced to just over 7% today.

In its last results to end of March 2020 Mulberry reported group revenue down 10% to £149.3m and an adjusted loss before tax of £14.2m, which took into account the expected hit from the COVID-19 crisis.

The British brand has been focusing much of its attention on Asia of late and during the last financial year saw its sales in the APAC region increase by 30%.

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