Mulberry said on Friday it would tap shareholders for up to £10m, as it slumped to a £34m loss for the year to April, compared with a £13m profit a year earlier.
Frasers said on Monday it had not been made aware of the fundraising until immediately prior to the public announcement to the market.
It said: “As a committed long-term investor in Mulberry, Frasers would have been willing to underwrite the subscription in its entirety, potentially on better terms for the company. Given this total lack of engagement, we believe the status quo to be an untenable position for Frasers and the other minority holders of Mulberry shares.”
Mulberry, which is known for “The Alexa” handbag inspired by model Alexa Chung, has been battling a wider downturn in the luxury market as well as a slump in UK sales after Rishi Sunak abolished VAT-free shopping for overseas tourists.
Its former boss Thierry Andretta was ousted over the summer after nine years in charge amid a sharp drop in sales.
Frasers, which owns Sports Direct, has built a 37pc stake in Mulberry after first investing in February 2020.
Shares in Mulberry jumped as much as 6.4pc following the announcement. Frasers’ bid would represent an 11pc premium on Mulberry’s closing share price on Friday.
Frasers said that as a standalone business, Mulberry was “facing unabating difficulties” such including rising costs and more selective spending among its wealthy customers.
It said: “Frasers are exceptionally concerned by the audit opinion in the latest annual report released on Friday, 27 September 2024, which notes a “material uncertainty related to going concern”.
“As a 37pc shareholder, Frasers will not accept another Debenhams situation where a perfectly viable business is run into administration.”
Mulberry declined to comment.