LONDON — The knives are out at Mulberry.
This story first appeared in the November 19, 2002 issue of WWD. Subscribe Today.
Roger Saul, chairman and director of Mulberry Group PLC, has accused his Singapore-based partners Ong Beng Seng and Christina Ong of trying to wrest control of the company without making a fair bid to shareholders.
Saul and Mulberry issued a statement Monday after the Ongs requested an extraordinary shareholders’ meeting to oust him as chairman and director of Mulberry PLC. The Ongs, who own 41.5 percent of the U.K. fashion and accessories firm through a company called Challice, wrote to shareholders over the weekend requesting the meeting.
A Mulberry spokesman said the meeting would be held over the next 28 days.
“We have asked for Roger Saul not to be involved in the day-to-day running of the business,” a Challice spokesman told WWD on Monday. “The reason is his disappointing performance over the course of many years.”
Mulberry’s executive board, which has a 42.5 percent stake in the group, said in the statement it supported Saul and viewed the Ongs’ move as “a veiled attempt” to take control of Mulberry without making a fair offer to shareholders. The group is quoted on the London Stock Exchange.
Saul, who owns 38 percent of Mulberry shares, said in the statement that the Ongs had reneged on their promise to roll out the Mulberry business in the U.S., and tried to seize control of the company.
“When I initiated this relationship with the Ongs, it was on the absolute condition that they would finance and fulfill Mulberry’s rollout program in the United States. This program has not been forthcoming, despite ongoing promises from Challice. The Ongs have repeatedly tried, by various means, to take control of Mulberry without honoring this commitment.”
He added that the Ongs’ “refusal to either support the group or withdraw as a major shareholder is clearly jeopardizing Mulberry’s ability to exploit the brand potential at a time when Mulberry is popular worldwide.”
As reported, the Ongs decided to put Mulberry’s U.S. store rollout on ice due to a cloudy economic outlook. Mulberry had planned to open five stores in the U.S. over the next few years, with the first — a Manhattan flagship — slated to open this fall.
At the time, Saul said he was disappointed in their decision, but that there was “no point in going ahead with those plans in a climate like this.”
As reported, in the fiscal year ended March 31, 2002, Mulberry posted a net loss of $2.6 million compared with net income of $451,500 last year. Sales grew 8 percent to $42 million. The company attributed the loss mainly to one-time costs such as store closures and the loss of revenue linked to refurbishment of Mulberry’s Bond Street store, which was closed temporarily. But Mulberry has had a bumpy financial performance since it went public in September 2000, swinging from booming profits at that time into declining profits or a loss ever since as a result of the weakening economy and a continuing revamp of the brand.