Today’s news in brief-14/10/24
Mulberry’s majority shareholder has rejected an increased bid from Frasers Group, which had offered £111m to take control of the luxury fashion brand. Frasers, already owning 37% of Mulberry, raised its offer to 150p per share after a previous £83m bid was turned down. However, Mulberry’s majority shareholder, Challice, expressed no interest in selling its stake, emphasising that Frasers cannot proceed without its support. Challice also said this was not the right time for a sale and regretted the distraction the bid was causing as the company focuses on a turnaround strategy.
Frasers Group announced that Ger Wright, who has served as the company’s managing director since 2022, will step down from her role on 30 November. Wright will remain on the board as a non-executive director. During her tenure, Wright was instrumental in advancing the group’s “elevation strategy” in the sports category, overseeing the introduction of new brands and concepts, such as running and outdoor wear, while also expanding the group’s international footprint. Michael Murray, CEO of Frasers Group, praised Wright’s leadership and said the company would continue to benefit from her sector expertise as it aims to accelerate growth in the sports market.
Selfridges has seen the value of its property portfolio decline by more than £600m, according to new accounts. The department store’s property assets, previously valued at £3.1bn, have been marked down by £638.6m, a drop attributed to rising interest rates and lower market rents. Selfridges also has over £1.7bn in loans, secured against its freehold property, maturing in 2025. This financial pressure comes as the department store undergoes ownership changes, with Saudi Arabia’s Public Investment Fund (PIF) acquiring a 40% stake. PIF’s acquisition follows the collapse of Austrian firm Signa, which previously co-owned Selfridges with Thailand’s Central Group.
Zalando has raised its full-year guidance after reporting strong third-quarter results. Revenues for the quarter reached £2bn, a 5% increase year-on-year, while gross merchandise value (GMV) grew by 7.8% to £2.9bn. Adjusted EBIT surged to £77.7m, up from £19.2m in the same period last year. As a result, Zalando now expects full-year GMV growth of between 3% and 5%, up from its previous forecast of 0% to 5%. The company also predicts revenue growth of 2% to 5%, reflecting improved consumer demand, particularly in the fall/winter season.
Bestseller, the Danish fashion retailer, reported an 8% increase in profits to £594m for the year ending July 2024, despite a 4% drop in revenue to £3.99bn. The company attributed its improved profitability to efficiencies in its logistics operations, even as online sales declined across both its partner platforms and its own channels. However, Bestseller saw continued growth in its physical retail stores, where sales increased by 5% year-on-year. The company expanded its retail footprint over the past year, opening more than 330 new stores, bringing its total to over 2,800 locations.
More than 70 retail CEOs have urged the UK government to ease the burden of business rates on the retail sector. In an open letter coordinated by the British Retail Consortium, the CEOs called on Chancellor Rachel Reeves to introduce a “Retail Rates Corrector,” a 20% reduction in business rates for retail properties. The group argued that the retail industry bears an unfair share of the overall tax burden, contributing 7.4% of all business taxes while only accounting for a smaller portion of the economy.
