In an exclusive interview, Mike Ashley’s Frasers Group expressed ongoing concerns regarding the governance of luxury handbag maker Mulberry, following its withdrawal from a takeover pursuit. After multiple rejected bids, including a recent £111 million offer, Frasers — which holds a 37% stake and is the second-largest shareholder — decided to step back.

Challice, Mulberry’s largest shareholder, controlled by entrepreneur Christina Ong and her husband, has made it clear that it has no intention of selling its 56% stake, effectively blocking any potential deal. Frasers’ final offer on Tuesday, which proposed 150 pence per share, was unanimously dismissed by Mulberry’s board, which deemed the proposal “untenable” and urged the company to focus on enhancing its commercial performance.

As Frasers officially withdrew from negotiations last Wednesday, it continued to voice concerns about Mulberry’s management. “We are still worried about the governance of Mulberry,” a spokesperson stated. They emphasized that the challenges in the market, coupled with a significant absence of a commercial strategy, have placed the company in a precarious financial situation.

Despite the setback, Frasers affirmed its commitment as a “long-term supporter” of Mulberry and called for a “credible plan” to be presented soon, reiterating a request for a seat on Mulberry’s board. On Wednesday afternoon, Mulberry’s shares saw a drop of over 6%, though they managed to recover some losses later in the day.

Frasers, which also owns House of Fraser, Evans Cycles, and the Flannels luxury streetwear chain, initially made an offer for Mulberry after the handbag maker revealed it needed to raise funds due to a significant drop in sales that resulted in a £34 million pre-tax loss last fiscal year. Mulberry has cautioned about a slowdown in spending among affluent consumers in both the UK and Asia.

The board of Mulberry had previously claimed that the recent appointment of Andrea Baldo as CEO, alongside an emergency £10.75 million share placement, provided a “solid platform to execute a turnaround.”

Frasers had emphasized the importance of its involvement, stating that it could not allow another situation like that of Debenhams, where a viable business fell into administration and resulted in a £150 million loss for the group.

According to UK takeover regulations, Frasers must make a firm offer for Mulberry by 5 PM on October 28, or else withdraw completely. Having opted out, Frasers is bound by a six-month moratorium on further offers unless certain conditions arise, such as Mulberry’s board agreeing to a proposal or a significant shift in the company’s circumstances.

As of now, Mulberry has been approached for further comments.