The new Mulberry Portobello tote

LONDON — Mike Ashley, the British retail entrepreneur who specializes in snapping up distressed companies, has purchased a 12.54 percent stake in Mulberry Group, according to stock market filings by both firms.

Ashley, who owns the British retailers Sports Direct, House of Fraser and Jack Wills, purchased the Mulberry stake through Frasers Group, which was formerly known as Sports Direct International.

A spokeswoman for Frasers Group declined to comment.

Mulberry is not a distressed company, although it has been going through a rocky patch due partly to Ashley. Although Mulberry declined to comment Monday, the Ashley investment must be a bitter pill to swallow.

In the first half ended Sept. 28, losses at Mulberry nearly doubled to 9.8 million pounds as the company continues to suffer from one of its top U.K. accounts, House of Fraser, going into administration in 2018.

In 2018 Mulberry issued a profit warning just weeks after Ashley purchased House of Fraser out of bankruptcy. Mulberry had operated 21 concessions at HoF and incurred exceptional costs due to the collapse.

Mulberry was owed millions, but it was never compensated for those losses despite demands from top British industry figures that Ashley pay House of Fraser’s suppliers.

Two years ago, just as the House of Fraser drama was unfolding, Mulberry’s share price was 10 pounds, and it has lost considerable ground since then. On Monday the stock closed up 0.4 percent at 2.50 pounds.

Mulberry is majority-owned by the Singapore-based Ong Beng Seng and Christina Ong. The Ongs have a 56 percent stake in the company with the rest of shares listed on the London Stock Exchange.

In the first half, revenues grew slightly to 68.9 million pounds, driven by international sales, which were up 12 percent, as well as digital sales, which rose 23 percent.

The U.K., Mulberry’s home market and its most significant one, was down 4 percent. Asia continues to be a growth driver for the British label, which now has 32 retail stores in the region.

The brand is also pushing hard on the sustainability front: It has launched the Portobello tote, its first, fully sustainable bag. It is made from grain leather from a gold-rated tannery; the material is a byproduct of food production and it comes unlined, with little or no hardware.

Mulberry’s chief executive officer Thierry Andretta was among the executives given the Positive Change accolade at the 2019 Fashion Awards in London in December, and he has been a driving force behind the sustainability drive. Mulberry’s Somerset, England, factories are carbon-neutral, and the company is set to secure a zero-waste-to-landfill certification in the coming months.

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