Mulberry Group (AIM:MUL) founder Roger Saul has suggested that global luxury titan LVMH “could step in” to support the ailing high-end handbag company.
Speaking to This is Money, Saul made the comment in the wake of an unsuccessful attempt by minority shareholder, Mike Ashley’s Frasers Group PLC (LSE:FRAS), to take over the business entirely.
In rejecting Ashley’s offer, which put a premium £83 million valuation on the group, Mulberry’s board said it “does not recognise the company's substantial future potential value”.
Saul, who launched the brand in the 70s before parting ways in 2002, also sees potential in the company. He called Mulberry “a strong brand”, but fired a few barbs at the current state of management.
“The company needs to go back to the spirit of the brand as a whole,” he said. "It has languished. It has become too reliant on handbags.”
Mulberry shares are currently down 40% since this time last year and closer to 95% below their all-time highs in Mulberry’s early-2010s golden period.
In making the failed takeover bid, Frasers said it was “the best steward for returning Mulberry to profitability”.
While Saul called Ashley a “good retailer” he said he saw a better fit with a European luxury heavyweight like LVMH.
“To build a brand like that from scratch would cost hundreds of millions of pounds,” he said of Mulberry.