REG - Mulberry Group PLC - Proposed £20 million fundraising & Trading Update

MulberryAnnouncement

20/06/2025 13:31

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RNS Number : 8190N  Mulberry Group PLC  20 June 2025

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"ANNOUNCEMENT") IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR
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WOULD BE UNLAWFUL. PLEASE SEE THE IMPORTANT NOTICES AT THE END OF THIS
ANNOUNCEMENT.

 

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF
THE UK VERSION OF REGULATION (EU) NO 596/2014 WHICH FORMS PART OF UK LAW BY
VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018, AS AMENDED. UPON THE
PUBLICATION OF THIS ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE, THIS
INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.

 

FOR IMMEDIATE RELEASE

 

20(th) June 2025

Mulberry Group plc

 

Proposed £20 million fundraising

 

and

 

Trading update

 

Mulberry Group plc (AIM: MUL) ("Mulberry" or the "Company" and, together with
its subsidiary undertakings, the "Group"), the British luxury lifestyle brand,
today announces that it is intending to raise £20 million of additional
capital to help fund its growth strategy and to meet the Group's medium term
revenue, profitability and cash generation targets (the "Fundraising").

 

The Company also announces an update on trading including the outturn for the
52 weeks ended 29 March 2025 ("FY25").

 

THE FUNDRAISING

 

Strategy update and reasons for the Fundraising

 

The Company, led by Chief Executive Andrea Baldo and a new management team, is
currently progressing a transformation plan in order to capitalise on the
Group's strengths and return it to profitability. Stated medium term goals for
the Company are annual revenues of £200 million and an earnings before
interest and tax margin of 15 per cent.

 

Key elements of this strategy - "Back to the Mulberry spirit" - were set out
in the Company's announcement of 30 January 2025 and its initial focus
included simplifying and streamlining the Company's operations to reduce the
cost base, refreshing the Company's brand platform, and leveraging creativity
and customer insights to deepen connections and drive demand.

 

The board of directors of the Company (the "Board") confirm that the Company
is making good progress on delivering to this plan and has already effected
the following:

 

 ·             Management team refresh: changes in key personnel at senior management level;
 ·             UK distribution: new wholesale agreements with premium department stores;
 ·             International: expansion in Nordstrom (US) and David Jones (Australia);
 ·             Product development: the launch of a "4 Seasons" approach;
 ·             Store estate: a review and exit of some of the non-profitable stores; and
 ·             Financial delivery: achieving a lower run rate cost base in the current
               financial year

 

Following a post FY25 year-end review by the executive management, and in
light of an even more challenging trading environment seen at a macro level,
the Board has concluded that the Company will require additional capital to
fund its growth strategy and achieve its desired financial targets.

 

The Company has requested HSBC UK Bank plc ("HSBC"), and HSBC has agreed, to
relax the minimum liquidity covenant contained within the facilities agreement
with the Company for an agreed period through to the completion of the
Fundraising, currently expected to be in July 2025. The relaxation of this
covenant will release approximately £6.5 million in short-term liquidity to
the Company. Separately, an affiliate of Challice Limited ("Challice"), the
majority shareholder of the Company, has entered into a cash backed guarantee
of £6.5 million (the "Guarantee") directly with HSBC matching the increased
covenant headroom. For the avoidance of doubt, no fee or other reimbursement
is payable to Challice or any of its affiliates by the Company for the
purposes of the Guarantee. Challice has agreed with HSBC that the Guarantee
will terminate upon completion of any fundraising by the Company.

 

Use of the Fundraising proceeds

 

The Board believes that targeted investment is key to unlocking future growth.
Following completion of the Fundraising, investment priorities of the Board
will include:

 

 ·             rebuilding core stocks, including the Company's 'iconic families' silhouettes
               to drive sell through and momentum;
 ·             investing in new, margin accretive revenue streams, such as outlets and the
               wholesale channel;
 ·             selective marketing spend, particularly in the Company's core markets of the
               UK and the US which will be aligned with profitable growth; and
 ·             upgrades to existing customer engagement and eCommerce tools.

 

The Board believes that the proceeds of the Fundraising will provide
sufficient capital to enable the Company to become cash flow positive.

 

Details of the Fundraising

 

The Board notes that Challice has confirmed that it would be willing to
underwrite the Fundraising in full if required.

 

However, believing that the Company's prospects are stronger if both its major
shareholders are supportive of the Fundraising and noting that any issue of
new equity requires the approval of both parties, the Board has been engaging
with, Challice and Frasers Group plc ("Frasers"), in order to reach agreement
on the final structure and terms of the Fundraising. 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, or
an independent committee thereof, will conclude on the most appropriate
structure for the Company.

 

It is anticipated that completion of the Fundraising will occur
contemporaneously with the publication of the Company's FY25 report and
accounts, which is currently expected to be in July 2025.

 

As both Challice and Frasers are "substantial shareholders" as defined by the
AIM Rules for Companies published by the London Stock Exchange (the "AIM
Rules"), any participations by Challice and / or Frasers in the Fundraising
are expected to constitute related party transactions in accordance with the
AIM Rules.

 

TRADING UPDATE

 

The Company also announces that for FY25, it expects to report revenues in the
region of £120 million (2024: £152.8 million) and an underlying loss before
tax in the region of £23 million (2024: £22.6 million). These results remain
subject to audit. The FY25 audit process is underway and, as stated above, the
Company currently expects to publish its audited FY25 results in July 2025.

 

Trading in the 11 weeks since the FY25 year end has been in line with the
Board's expectations. The Board does not expect material overall revenue
growth in the current financial year.

 

In line with the Company's strategy, the Board has taken action to reduce the
Company's cost base and identified and implemented approximately £5.9 million
of annualised gross cost savings, establishing a lower and more sustainable
cost structure for the future. In addition, the Company will continue
optimising its store estate and enhancing operational efficiencies.

 

ANDREA BALDO, CHIEF EXECUTIVE OFFICER COMMENTED:

"When I outlined our strategy in January, I set out a clear two-phased
approach. In the near term, we are firmly in turnaround mode - focused on
rebuilding profitability and gross margin, while strategically investing in
brand building initiatives.

Since then, we've taken decisive steps to improve performance and lay the
groundwork for sustainable growth. These include securing UK distribution
deals with Flannels and John Lewis, expanding international reach through new
doors in Nordstrom (US) and David Jones (AU), and enhancing our product offer
by growing our icon families in full price stores and optimising our inventory
levels for outlet stores.

We've refreshed the executive team, aligned talent to our revised strategy,
and launched a new brand campaign to drive customer engagement. Operationally,
we've enhanced customer service through a new incentive model linked to
in-store conversion, improved relationships with our supply chain partners and
built a robust wholesale pipeline for FY26. Alongside this, we've taken action
to reduce costs - restructuring head office and exiting unprofitable stores -
delivering a lower run-rate cost base into FY26.

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."

FOR FURTHER DETAILS PLEASE CONTACT:

 

 Mulberry
 Billie O'Connor & Kate Anthony Wilkinson       companysecretary@mulberry.com

 Headland (Public Relations)
 Lucy Legh / Joanna Clark                       Tel: +44 (0) 20 3805 4822

 Houlihan Lokey UK Limited (NOMAD)
 Tim Richardson                                 Tel: +44 (0) 20 7839 3355

 Peel Hunt LLP (Corporate Broker)
 James Thomlinson                                Tel: +44 (0) 20 7418 8900

 

This Announcement should be read in its entirety. In particular, you should
read and understand the information provided in the "Important Notices"
section of this Announcement.

The person responsible for arranging the release of this Announcement on
behalf of the Company is Billie O'Connor, a director of the Company.

IMPORTANT NOTICES:

 

This Announcement or any part of it is for information purposes only and does
not constitute or form part of any offer to issue or sell, or the solicitation
of an offer to acquire, purchase or subscribe for, any securities in the
United States, Australia, Canada, the Republic of South Africa or Japan or any
other jurisdiction in which the same would be unlawful.

This Announcement has been issued by, and is the sole responsibility of, the
Company. No person has been authorised to give any information or to make any
representations other than those contained in this Announcement and, if given
or made, such information or representations must not be relied on as having
been authorised by the Company.

This Announcement may include statements that are, or may be deemed to be,
"forward-looking statements". These forward-looking statements can be
identified by the use of forward-looking terminology, including the terms
"believes", "estimates", "plans", "projects", "anticipates", "expects",
"intends", "may", "will", "would" or "should" or, in each case, their negative
or other variations or comparable terminology. These forward-looking
statements include matters that are not historical facts. They appear in a
number of places throughout this Announcement and include statements regarding
the Board's current intentions, beliefs or expectations concerning, among
other things, the Company's results of operations, financial condition,
liquidity, prospects, growth, strategies, and the Company's markets. By their
nature, forward-looking statements involve risk and uncertainty because they
relate to future events and circumstances. Actual results and developments
could differ materially from those expressed or implied by the forward-looking
statements. Forward-looking statements may and often do differ materially from
actual results. Any forward-looking statements in this Announcement are based
on certain factors and assumptions, including the Board's current view with
respect to future events and are subject to risks relating to future events
and other risks, uncertainties and assumptions relating to the Company's
operations, results of operations, growth strategy and liquidity. Whilst the
Board consider these assumptions to be reasonable based upon information
currently available, they may prove to be incorrect. Save as required by
applicable law, the AIM Rules for Companies or the Disclosure Guidance and
Transparency Rules of the Financial Conduct Authority (the "FCA"), the Company
undertakes no obligation to release publicly the results of any revisions to
any forward-looking statements in this Announcement that may occur due to any
change in the Board's expectations or to reflect events or circumstances after
the date of this Announcement.

Houlihan Lokey UK Limited ("Houlihan Lokey"), which is authorised and
regulated by the FCA in the United Kingdom, is acting exclusively for the
Company and no one else in connection with the Fundraising, and Houlihan Lokey
will not be responsible to anyone other than the Company for providing the
protections afforded to clients of Houlihan Lokey or for providing advice in
relation to the Fundraising or any other matters referred to in this
Announcement. Neither Houlihan Lokey nor any of its affiliates owes or accepts
any duty, liability, or responsibility whatsoever (whether direct or indirect,
whether in contract, in tort, under statute or otherwise) to any person who is
not a client of Houlihan Lokey in connection with the matters referred to in
this Announcement, any statement contained herein or otherwise.

Houlihan Lokey's responsibilities as the Company's nominated adviser under the
AIM Rules for Nominated Advisers published by the London Stock Exchange are
owed solely to the London Stock Exchange and are not owed to the Company or to
any director of the Company or to any other person.

Peel Hunt LLP ("Peel Hunt") is authorised and regulated by the FCA in the
United Kingdom and is acting exclusively for the Company and no one else in
connection with the Fundraising, and Peel Hunt will not be responsible to
anyone other than the Company for providing the protections afforded to its
clients or for providing advice in relation to the Fundraising or any other
matters referred to in this Announcement.

No representation or warranty, express or implied, is or will be made as to,
or in relation to, and no responsibility or liability is or will be accepted
by the Houlihan Lokey, Peel Hunt or any of their respective affiliates,
agents, directors, officers, consultants, partners or employees as to, or in
relation to, the accuracy or completeness of this Announcement or any other
written or oral information made available to or publicly available to any
interested party or its advisers, and any liability therefor is expressly
disclaimed.

Neither the content of the Company's website nor any website accessible by
hyperlinks on the Company's website is incorporated in, or forms part of, this
Announcement.

 

 

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