Mulberry in talks over £20m cash-call as losses widen
The Somerset-based firm said it was launching the cash-call after a 'post-2024-25 year-end review by the executive management, and in light of an even more challenging trading environment'.
It added: 'The board has concluded that the company will require additional capital to fund its growth strategy and achieve its desired financial targets.'
Shares in the firm plunged 11% in Friday afternoon trading.
Mulberry said it was in discussions with majority shareholder Challice – a group controlled by Singaporean entrepreneur Christina Ong and husband Ong Beng Seng – and major stakeholder Mike Ashley's Frasers Group over the fundraising.
It comes as Mulberry expects to slump to an underlying pre-tax loss of around £23 million for the year to March 29 against losses of £22.6 million the previous year.
The group is set to report annual revenues tumbling 21% to around £120 million, adding that it does expect 'material overall revenue growth' in the new financial year.
Andrea Baldo, chief executive of Mulberry, said the group had taken action to overhaul the business and cut costs as part of plans laid out in January, including shutting some stores.
It already axed around 85 jobs in the run-up to Christmas – around a quarter of its workforce – largely impacting head office workers.
Mr Baldo said: 'In the near term, we are firmly in turnaround mode, focused on rebuilding profitability and gross margin, while strategically investing in brand building initiatives.'
He added: 'We've taken action to reduce costs – restructuring head office and exiting unprofitable stores, delivering a lower run-rate cost base into 2025-26.
'Following our year-end review, the board and I are confident that, with additional funding, we can accelerate momentum and deliver against our targets at pace.'
The firm said shareholder Challice was willing to underwrite the fundraising in full, but Mulberry said it hoped Frasers would also take part.
'Whilst these discussions are ongoing, the board notes that it may not be possible for all parties to agree fully on the structure of the fundraising, in which case the board… will conclude on the most appropriate structure for the company,' Mulberry said.
It expects to complete the fundraising in July, to coincide with the publication of its annual results.
Mr Baldo, who joined the group in September last year from Ganni, is restructuring the business with a focus on the UK market, rather than China, under aims to turn around its fortunes.
Founded in 1971 in Somerset, Mulberry is most famous for its luxury, leather handbags.
But it has seen trading hit hard in recent years, partly as a result of waning appetite for luxury goods among Chinese consumers, previously a key market for the fashion company.
Mr Baldo said, in January, the company will focus less on China and close 12 stores across its Asian estate while aiming to open more shops in UK cities in future.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Herald Scotland
an hour ago
- The Herald Scotland
'Emerging markets no longer on the periphery of progress'
Over the past decade, many investors have looked at EM with a mixture of caution and nostalgia, haunted by memories of currency crises and political turmoil. But today's EM landscape looks very different. Structural reform, rising domestic consumption, and tech-led innovation are combining to produce companies and economies that are adaptable and profitable. This transformation is perhaps best captured by businesses like a 'super-app' used by the majority of the adult Kazak population for everything from banking and bill payments, to shopping and ride-hailing. It has fundamentally reshaped the country's economy. Or take Luckin Coffee in China, which now has many more outlets than Starbucks and continues to grow rapidly into an underpenetrated market. These aren't speculative moonshots. They are scaling in key domestic markets with improving profitability and thus operational resilience. Two key headwinds - the strong US dollar and negative sentiment towards China - have been turning. An increasing amount of EM-to-EM trade is being done in non-dollar currencies. The weak dollar is not only supportive of EM financial conditions but also creates favourable sentiment at a time when there are plenty of reasons to ask questions of the traditional safe-haven countries of the world. With over $22 trillion held by non-US investors in American assets - much of it unhedged - even a small shift in allocation could drive renewed EM demand. Meanwhile, China's trajectory is not solely about geopolitics or trade policy, as some doomsayers posit. In fact, this may be the wrong focus completely. It's about a massive, increasingly self-sufficient domestic economy. Retail sales in China are over ten times greater than its exports to the US - a fact that should redirect our focus from tariffs to the consumer. Companies like Meituan and DeepSeek are testament to China's technological resilience. And for what it's worth, over 70% of the world now trades more with China than with the US. On top of this, Chinese consumer spending is visibly starting to recover. Read more: We often talk about EM as if it were a single monolith. It is not. What binds these regions is clearly not geography or even income level. But the quality of opportunity and scale of ambition across such a vast set of countries is trending upwards and worth shouting about. There are many more world class EM companies than before, in a range of industries: in semiconductors, gaming, fintech, and green energy, to name a few. For example, CATL in electric vehicle batteries, SK Hynix in High Bandwith Memory (memory chips used for high-performance computing and AI), and Tencent and SEA in gaming. The best companies earn their place in portfolios through world-class execution, deep competitive moats, high returns on capital, and often, scarcity of competition. EM's best companies are, in many cases, the only game in town for investors seeking exposure to essential themes like electrification, digital transformation, and resource resilience. Perhaps the most dangerous risk for investors today is underexposure to this transformation. Valuations remain modest. Domestic markets are deepening. Currency, debt, and governance risks - while still present - are far better managed than in previous cycles. And most importantly, these companies are not all reliant on a rebound in global trade or commodity prices. Many are thriving in local ecosystems, with local customers, on local capital. This is not to say the path ahead is smooth. Politics is messy (though isn't that true in developed markets too?). Markets are often volatile. But the direction of travel is clear. Emerging markets are no longer on the periphery of progress - they are increasingly the protagonists. To ignore them is not caution, it's more likely negligence. Andrew Keiller is a partner at Baillie Gifford
Scottish Sun
5 hours ago
- Scottish Sun
Huge high street retailer launches 20% off closing down sale ahead of store shutting for good in weeks
No reason for the abrupt closure has been given to customers GAME OVER Huge high street retailer launches 20% off closing down sale ahead of store shutting for good in weeks A HUGE high street retailer has launched a 20 per cent off going out of business sale with just weeks left until the store shuts for good. The hugely popular town centre video game shop is due to close down in a matter of weeks it has announced. 4 The store now has signs in the window announcing its imminent closure Credit: Google Maps 4 Several GAME stores have closed across the UK recently Credit: Alamy GAME, in Festival Place, Basingstoke, suddenly announced it will be closing down next month. The retailer will be holding a 20 per cent off everything closing down sale before shutting up shop for good on August 10. GAME sells a variety of video games, consoles and pop culture merchandise. The retailer came under fire recently when it cancelled pre-orders of heavily anticipated Nintendo Switch 2 consoles. Its Basingstoke location is now due to close for good with signs seen in the window announcing the closure. No reason has been given for the retailers abrupt departure from the shopping centre. Products including popular video games and Lego sets have had their stock prices reduced. Retailer GAME, which specialises in consoles, games and accessories was acquired by Frasers Group in 2019 as part of a £52 million deal. The retailer has closed a number of locations across the UK in recent months. Signs in the window of the Basingstoke store read: "This store will cease trading on 10th August. Why are so many shops going bust? "Please shop online at A number of GAME stores have closed with some being converted into concessions within Sports Direct and other Frasers Group stores. Locals have been left disappointed by the news of the Basingstoke location's closure. Following Frasers Group acquiring GAME in 2019 significant restructuring and downsizing of the video game retailer has commenced. While plans don't indicate that the stores will disappear from the British high street completely many locations are expected to close. 4 The retailer has launched a 20 per cent off all stock closing down sale Credit: Alamy 4 The store will be sorely missed by locals Credit: Google Maps Downfall of GAME Game was acquired by billionaire businessman Mike Ashley's Frasers Group in 2019 as part of a £52million deal. However, by January 2020, the retailer announced plans to close 40 of its more than 300 stores across the UK. Today, there are approximately 240 Game stores operating nationwide. This decline comes amid a significant drop in sales of physical video games, compared to Game's heyday in the early 2000s. The Digital Entertainment and Retail Association (ERA) revealed that in 2022, nearly 90 per cent of all video games sold in the UK were digital downloads.
The Sun
5 hours ago
- The Sun
Huge high street retailer launches 20% off closing down sale ahead of store shutting for good in weeks
A HUGE high street retailer has launched a 20 per cent off going out of business sale with just weeks left until the store shuts for good. The hugely popular town centre video game shop is due to close down in a matter of weeks it has announced. 4 4 GAME, in Festival Place, Basingstoke, suddenly announced it will be closing down next month. The retailer will be holding a 20 per cent off everything closing down sale before shutting up shop for good on August 10. GAME sells a variety of video games, consoles and pop culture merchandise. The retailer came under fire recently when it cancelled pre-orders of heavily anticipated Nintendo Switch 2 consoles. Its Basingstoke location is now due to close for good with signs seen in the window announcing the closure. No reason has been given for the retailers abrupt departure from the shopping centre. Products including popular video games and Lego sets have had their stock prices reduced. Retailer GAME, which specialises in consoles, games and accessories was acquired by Frasers Group in 2019 as part of a £52 million deal. The retailer has closed a number of locations across the UK in recent months. Signs in the window of the Basingstoke store read: "This store will cease trading on 10th August. Why are so many shops going bust? "Please shop online at A number of GAME stores have closed with some being converted into concessions within Sports Direct and other Frasers Group stores. Locals have been left disappointed by the news of the Basingstoke location's closure. Following Frasers Group acquiring GAME in 2019 significant restructuring and downsizing of the video game retailer has commenced. While plans don't indicate that the stores will disappear from the British high street completely many locations are expected to close. 4 4 Downfall of GAME Game was acquired by billionaire businessman Mike Ashley's Frasers Group in 2019 as part of a £52million deal. However, by January 2020, the retailer announced plans to close 40 of its more than 300 stores across the UK. Today, there are approximately 240 Game stores operating nationwide. This decline comes amid a significant drop in sales of physical video games, compared to Game's heyday in the early 2000s. The Digital Entertainment and Retail Association (ERA) revealed that in 2022, nearly 90 per cent of all video games sold in the UK were digital downloads. Why are retailers closing stores? RETAILERS have been feeling the squeeze since the pandemic, while shoppers are cutting back on spending due to the soaring cost of living crisis. High energy costs and a move to shopping online after the pandemic are also taking a toll, and many high street shops have struggled to keep going. However, additional costs have added further pain to an already struggling sector. The British Retail Consortium has predicted that the Treasury's hike to employer NICs from April will cost the retail sector £2.3billion. At the same time, the minimum wage will rise to £12.21 an hour from April, and the minimum wage for people aged 18-20 will rise to £10 an hour, an increase of £1.40. The Centre for Retail Research (CRR) has also warned that around 17,350 retail sites are expected to shut down this year. It comes on the back of a tough 2024 when 13,000 shops closed their doors for good, already a 28% increase on the previous year. Professor Joshua Bamfield, director of the CRR said: "The results for 2024 show that although the outcomes for store closures overall were not as poor as in either 2020 or 2022, they are still disconcerting, with worse set to come in 2025." It comes after almost 170,000 retail workers lost their jobs in 2024. End-of-year figures compiled by the Centre for Retail Research showed the number of job losses spiked amid the collapse of major chains such as Homebase and Ted Baker. It said its latest analysis showed that a total of 169,395 retail jobs were lost in the 2024 calendar year to date. This was up 49,990 – an increase of 41.9% – compared with 2023. It is the highest annual reading since more than 200,000 jobs were lost in 2020 in the aftermath of the COVID-19 pandemic, which forced retailers to shut their stores during lockdowns. The centre said 38 major retailers went into administration in 2024, including household names such as Lloyds Pharmacy, Homebase, The Body Shop, Carpetright and Ted Baker. Around a third of all retail job losses in 2024, 33% or 55,914 in total, resulted from administrations. Experts have said small high street shops could face a particularly challenging 2025 because of Budget tax and wage changes. Professor Bamfield has warned of a bleak outlook for 2025, predicting that as many as 202,000 jobs could be lost in the sector. "By increasing both the costs of running stores and the costs on each consumer's household it is highly likely that we will see retail job losses eclipse the height of the pandemic in 2020."
