Mike Ashley’s retail empire has bought a 12.5 per cent stake in luxury fashion brand Mulberry.
On Monday, Ashley’s Fraser’s Group announced that it had bought the shareholding as part of a “key strategic priority” to reposition the group towards “premium third-party brands”.
While the final sale price was not disclosed, Mulberry’s current market value as of Friday, when the transaction took place, estimates that it would have been worth approximately £19m.
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The British fashion label sells goods both in-store and online and is best known for its leather handbags which can cost more than £1,000 each.
In a statement, Frasers, which is 65 per cent-owned by Ashley, said: “Mulberry is a global luxury brand with a rich British heritage.
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“A key strategic priority for Frasers Group is the elevation of our retail proposition and building stronger relationships with premium third-party brands.
“Frasers Group looks forward to working more closely with Mulberry for the benefit of shareholders of both companies.”
The move comes after reports that Ashley had been in talks with Mulberry for a number of months because its products are sold by House of Fraser, which he bought in 2018 for £90m.
The Sports Direct tycoon, who also owns Premier League football club Newcastle United, has been expanding his retail empire in recent years.
Ashley’s acquisitions of struggling retailers include Jack Wills, Evans Cycles, Sofa.com, Debenhams and Game Digital.
Mulberry is the most upscale investment for the Fraser’s Group so far, which also includes Flannels, Slazenger, Kangol, Karrimor and a 26 per cent stake in French Connection.
However, the fashion label has been under pressure in recent months, having reported a loss of £9.9 million before tax in the six months to the end of September 28 – a setback which executives blamed on heavy discounting and market conditions.
Earlier this week, it was revealed that Ashley is in talks to sell Newcastle United Football Club to Saudi Arabia’s sovereign wealth fund for £340m.
Putting an exact figure on the value of Ashley’s combined holdings has been estimated by Forbes at $3bn (£2.3bn).