Following today’s news that Frasers Group has made an £83m offer to buy Mulberry: Alice Price, associate apparel analyst at GlobalData, a leading data and analytics company, offers her view: “Fraser’s £83m bid for Mulberry – which would see its 37% stake rise to 100% – comes after the heritage brand has suffered with dwindling sales in recent years, with its revenue plummeting 18% in the 25 weeks to 27 September 2024. As well as economic pressures across Europe and the US impeding demand for luxury goods, the post-Brexit removal of tax-free shopping in the UK will have also impacted its performance. While tourists previously enjoyed buying from Mulberry when visiting the UK due to the brand’s strong British heritage, they are now choosing to buy from other designers in European cities such as Paris and Milan, where purchases remain tax-free.
“Mulberry has also failed to modernize and align its proposition with current trends, losing out to competitors with superior fashion credentials such as Dior and Louis Vuitton, which have successfully penetrated the Gen Z demographic thanks to their incorporation of modern styles and silhouettes. Instead, Mulberry has relied too heavily on classic styles and its heritage status to drive growth. This has led it to lose relevance and follow a similar downward trajectory to fellow heritage brand Burberry, which too has lost appeal in the increasingly saturated luxury market.
“Fraser’s latest offer for Mulberry follows a string of recent investments in premium and luxury brands, namely its increased stake in Hugo Boss in July 2024, and most notably its purchase of online luxury marketplace Matches Fashion in December 2023, which it then put into administration three months later. As a pre-existing stakeholder, coupled with its superior retail expertise and best in class distribution capabilities, Fraser’s should have the expertise required to steer Mulberry back to profitability. However, it’s lack of previous success within the luxury market and limited international perspective pose limitations.”
