Mike Ashley’s Frasers Group has made an £83 million takeover bid for struggling handbag maker Mulberry.

The fashion brand has been hit hard by a downturn in the luxury sector and warned late last week that it would need to raise cash amid concerns about its long-term future.

Frasers Group, which owns Sports Direct and Flannels, already owns a 37% stake in the company.

The retail giant said it put forward an approach worth 130p per share, valuing the stake in the company it does not own at £52.4 million.

It comes after Mulberry said on Friday that it needed to raise more than £10 million after slumping to a significant loss for the past year.

The luxury fashion firm reported a £34.1 million pre-tax loss for the year to March 31, compared with a £13.2 million profit a year earlier.

It has said sales dropped more sharply over the spring and summer, with group revenues plunging 18% over the past 25 weeks as wealthy shoppers rein in spending.

Within the accounts, Mulberry warned that the downturn has resulted in a “material uncertainty, which may cast significant doubt on the group and parent company’s ability to continue as a going concern” if its struggles continue.

Frasers said it is pushing to take control of Mulberry partly due to these concerns about the long-term viability of the business.

The company said: “Frasers are exceptionally concerned by the audit opinion in the latest annual report released on Friday September 27 2024, which notes a ‘material uncertainty related to going concern’.

“As a 37% shareholder, Frasers will not accept another Debenhams situation where a perfectly viable business is run into administration.”

Mr Ashley held a roughly £180 million stake in Debenhams before the historic retailer collapsed into administration in 2020, with his stake becoming almost worthless.

Mulberry was founded in Somerset in 1971 by Roger Saul and has celebrity fans including the Princess of Wales and Kate Moss.

The company is being led by Andrea Baldo after the former Ganni chief executive replaced long-serving chief Thierry Andretta in a bid to drive improved performance.

Mulberry has been contacted for comment.

Shares in the company were 9% higher at 128p on Monday.