Frasers has acquired a 12.5 per cent stake in the British luxury brand Mulberry. Mulberry has had a long-term presence in Fraser department stores and with the company planning to open more upmarket Frasers stores there seems to be clear commercial reasoning behind the move. Mulberry is a global luxury brand with a rich British heritage. A key strategic priority for the Frasers Group is the elevation of its retail proposition and building stronger relationships with premium third-party brands. Frasers looks forward to working more closely with Mulberry for the benefit of shareholders of both companies. The move to buy a stake in Mulberry represents Frasers’ biggest step in the luxury direction yet.

Mulberry has had more than its fair share of challenges and this can be seen in its share price. It reached 1,132.50p in September 2016 but began to fall sharply exactly two years ago and now it is possible to buy a Mulberry share for 250p. That puts the entire market capitalisation of the company at just over £150 million. So Frasers doesn’t have to pay a huge amount for its stake.

Seven of House of Fraser’s 50-plus stores will be turned into a new luxury mini chain called Frasers. Frasers will stock more designer labels while House of Fraser will cater to a more mass market audience.