The company survival is on a knife edge, as sales slump, and along with the fall in sales the underlying rents and staffing costs just continue to rise.
Mistake after mistake, buying out their partners at the wrong time, left them with greater liabilities, rents that would have remained with the former partners, are now the company’s along with lease liabilities.
As sales fall, the cost of servicing the overseas shops increases substantially.
Of course the new CEO has got to come out with positive views about the future with the expected caveats that he can blame if/when it all goes pear shaped.
Of course online sales as a percentage increased as shop sales fall but that is not much of a positive, if you break down the actual numbers. |
2*
Mulberry posted a pretty woeful set of FY numbers this morning, ones which prompted new CEO Andrea Baldo to note ” "Though I've only been in the role of CEO for under three months, the first half results illustrate the clear need to reprioritise and rebuild the business.” Performance was bad. Group revenue was down 19% to £56.1m with UK retail sales down 14% to £31.3m...
...from WealthOracle
wealthoracle.co.uk/detailed-result-full/MUL/994 |
Is Mulberry really worth a fig now - costs overtaking sales, they have fallen from great hights to be rolling around in the gutter.
They have done everything wrong over the past three/four years - buying out partners, over pricing their goods, and jumping up above their station, after all they are just bag makers and they thought they were more.
If UK retailers do sell their stock of bags at Christmas I doubt if they will be replacingt them, as Mulberry like a lot of other firms, try going over their heads and selling directly, without benefits to those that display their goods in stores.
Will one of the Big Luxury Brands even bother now?
In fact the first mistake they make in the 90's was opening a store on Bond Street and competing with your retailers is never a good odea. |
The majority owners have the whip hand until such time as it can be proved that they are abusing minority holders.
By not advising MA of the intended raise at £1 or discussing it with someone that owned 36% of the business was the first thing that supports the allegation of acting against minority holders interests.
I believe no matter what (bar a legal case) they have no intention of selling to MA at any sensible price.
I guess they have made other plans and those may not have included any current minor holders.
Does the major holder sit as a shadow on the board or at the meetings?
I have seen this occur before elsewhere, and the board responded that they do take take part, just. listen. Then the regulators would do nothing about it, even when it was put into receivership - but the company was then sold to a director. |
Largest shareholder happy to raise new equity at £1. Second-largest indicatively offering £1.50 to purchase the company. Board stuck because it thinks it knows the largest shareholder (which clearly has a blocking vote in takeover terms) won't accept £1.50 and so the offer isn't "tenable".
Isn't the obvious answer for the board to insist on a formal sale process to see what the company might be worth to a genuine third party? The problem would be how to prevent this simply being seen as a stalking horse process to work out how much one of the 2 interested shareholders would have to pay to buy the other out. Ideally you'd have both major shareholders agree in principle to sell to the highest bidder if a price can be agreed above a certain level, with the sale process run as close to arms length as can be managed reporting to an independent director - but is there anything in applicable regulations that can facilitate this sort of outcome? |
From Citywire yesterday.
Handbags at Mulberry’s future over Frasers’ bid, says Hargreaves
The latest bid by Frasers (FRAS) for luxury handbag group Mulberry (MUL) has been rejected but Hargreaves Lansdown says there are hopes for a higher offer.
AIM-listed Mulberry turned down Fraser’s latest 150p per share offer as Challice, its largest 56% shareholder, refused to sell.
‘Words of frustration have been pumped out from both sides,’ said analyst Susannah Streeter.
‘Frasers Group has clearly lost so much faith in the current direction of the company that it’s fearful of collapse and has warned it does not want to see another Debenhams-style scenario play out.
‘But Challice is also clearly exasperated by the relentless focus, wanting to give the new chief executive Andrea Baldo a chance to bed in and help revive the brand’s fortune.’
An excited market pushed Mulberry shares up 11.5%, or 13p, at 125.5p today, although they are still down 24% this year. |
From day one, the board accepted dispicably, not even advising such a large shareholder of their intentions, but they would have done so with the controlling one. |
I don't think any offer he makes will be accepted.
I expect they have their own agenda. |
Frasers need to offer more imo. 1x sales atleast + a bit for the brand name |
The problem is that the majority shareholder seems to have othher plans, which maybe good for them but not for any other atakeholder.
I think the latest offer is a very good one in light of recent trading etc. |
Looks like MA is up for a fight here. 150p indicative and a cleverly-worded presentation of it. Something for the directors in particular to think about over the weekend. |
So Frasers have put up and went for the clawback as expected.
I look forward to their next move. |
I wonder how long it with take Frasers to go for the jugular of Mulberry, as without a doubt in my mind they have and are abusing small shareholders. |
It needs to be under the umbrella of one of the major luxury goods brands, that has the firepower to supercharge the brand.
When you consider the shareprice this was trading at years ago, from around 50p in 2004 to around £23/24.00 nine or ten years later, only to sink into huge debts and a current share price of £1.15/1.30.
It is not just the market, it is bad management and poor decision making.
However MA would make a good interim owner, as the majority stakeholder holds everyone over a barrel. |
China bounce back should help demand free
D |
As a longtime shareholder I look forward to a tussle for this company. Great products which are too expensive for the UK market making them reliant on Asian buyers who are now broke. If they could broaden their market whilst sticking to their design ethos as companies like Habitat have done in the past I foresee a bold future ahead. Unlikely under the continuing umbrella of Challice and the Ongs however. |
As expected, the majority shareholder is intent on maintaining their iron grip on the company, hence the way they have handled the funding.
It is clear that the intention was to dilute all other shareholders and maintain their position or improve upon it.
It has always been clear that they put personal interests first.
As I mentioned yesterday, I envisage a court case as minority shareholders interests are the last thing the board are focusing upon. |
In theory, yes.
D |
In play then? Does that open the door to a better offer from another brand or fashion house? |
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