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Frasers Group buys stake in Mulberry

Mike Ashley’s Frasers Group, formerly known as Sports Direct International, has bought a 12.5% stake in British luxury handbag company Mulberry.

The retailer announced it had bought the shareholding as part of a “key strategic priority” to elevate its retail proposition and build “stronger relationships with premium third-party brands”. 

The sale price was not disclosed, but when the transaction took place, it would have been worth just under £19m, based on its share price at the time.

Last week the retailer announced it had settled a tax dispute with Belgian authorities that were investigating the group’s movement of goods through the country.

 

Readers' comments (2)

  • For the same investment Ashley could of bought 19 or so independent stores in areas where he’s trying to establish newly opened Flannels stores, he’d of bought the stock, the customer databases, the staff, etc, so he’d be in a position where overnight much of the established local competition would of been removed, the Independents staff would be forced to leave or become flannels advocates (bringing with them their own loyal customers), he’d have huge swathes of data to market to (in store systems, social media followings and staff personal relationships) as well as cheap stock to liquidate so his investment would be repaid quickly. A win-win.

    I appreciate this investment in mulberry stands on its own merits but I just see the above as an additional investment strategy that could be considered reasonable.

    Those business owners that choose to accept the buyout offer walk away with their heads held high and money in their pocket to retire or start new projects, the staff have the option to retain their jobs, flannels increases market share for relatively low investment - am I missing a downside?

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  • The downside is Mulberry is immediately devalued by being partially owned by Sports Direct (It will never be known as Frasers to the man in the street). Association has its negatives.

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