Mulberry eyes 20 million pound fundraise as transformation plan progresses
British brand Mulberry is looking to raise 20 million pounds of additional capital in a fundraising to back its growth strategy as its ongoing transformation plan progresses. It comes 'in light of an even more challenging trading environment seen at a macro level', the group noted.
In a regulatory filing, the luxury accessory label said, with the fundraising, its main priorities included rebuilding core stocks; investing in new accretive revenue streams, such as outlets and wholesale; select marketing spend within the UK and US; and upgrading existing customer engagement.
Mulberry's majority shareholder Challice Limited said it was willing to underwrite, in full, the fundraising, which is expected to complete in July 2025. The board has also been engaging with the company's other major shareholder, Frasers Group, in order to reach a final structure and agreement of the fundraising.
Mulberry has received approval for a request made to HSBC UK Bank to relax the minimum liquidity covenant for an agreed period until the fundraising is complete, releasing around 6.5 million pounds to the company. An affiliate of Challice has further entered into a cash backed guarantee matching the increased covenant headroom. Losses anticipated to marginally narrow in FY25
The news comes as Mulberry reported that it is expecting revenues in the region of 120 million pounds for FY25, down from 152.8 million pounds in the year prior, with an underlying loss before tax of around 23 million pounds, narrowing from the prior 22.6 million pounds. Trading in the first 11 weeks of the fiscal year is 'in line' with expectations. Its audited financial statements are scheduled for July 2025.
Mulberry's pursuit of fundraising comes amid a wider transformation strategy, 'Back to the Mulberry spirit', which has set out to simplify and streamline operations, reduce cost base and refresh the brand platform. Since January, when the plan was introduced, the company has made changes to its management team, established new wholesale agreements in the UK and US, launched a '4 seasons' approach and reviewed its store estate, resulting in the closure of non-profitable stores.
In a statement, Andrea Baldo, chief executive officer of Mulberry, said the company was 'firmly in turnaround mode – focused on rebuilding profitability and gross margin, while strategically investing in brand building initiatives'. Baldo continued: '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."
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