Mike Ashley would like to buy Mulberry, but Mulberry doesn’t want him

Welcome to Monday. In brief —

Noting another WasteCo director has stepped down.

The much larger Waste Services Group, over in Aus, is attracting +$1bn bids.

David Effune, who owns The New York Sun, is reportedly closing on a 550mn quid deal to buy The Telegraph. I wasn’t aware the Sun even still existed in New York, so that’s news to me.

Mike Ashley would like to buy Mulberry

We talk a lot about Mike Ashley here mostly because he is so fun to talk about — he’s a boozer! He buys companies nobody else wants! He is a self-described “power drinker”! And now Ashley, via Frasers – which he controls — would like to buy Mulberry, the British leather goods company. You might mistake Mulberry for Burberry, or perhaps you forgot it existed at all (I had). But it is A Thing, and at one point Alexa “cool girl” Chung had a bag named after her that was a veritable hit — old heads will remember that Chung was so symbolic of “indie sleeze” at the time (interestingly, “Indie Sleeze1” is having something of a revival. Maybe Mulberry is due for a revival too?)

Mulberry’s board rejected Ashley’s initial request to be appointed to Mulberry’s board. Then Mulberry released an earnings statement that — and I am not making this up — said that Mulberry may have issues being a going concern, going forward. Fraser’s made a £83 million bid in response for the entire company, which was then rejected. On the other side of things, the patriarch of the billionaire Ong family, which has the controlling stake in Mulberry, has just been charged with corruption in Singapore. Maybe the Ong family has bigger things to think about! But they still don’t want to sell Mulberry!

As an aside — the gifts & “bribery” that Ong has been charged with are kind of hilarious:

…Most of the charges related to gifts from Ong, including tickets to English Premier League football matches, the Singapore F1 race, and plays including Harry Potter and the Cursed Child, Hamilton and Kinky Boots as well as a business-class flight from Doha to Singapore in 2022

I mean, I don’t really know if I could seriously say, as a judge, “sir, you gave out tickets to Kinky Boots”. I’m not sure if this would sway me as the receiver of the bribe into doing whatever the gifts are intended to do. I am sure the F1 and all that are nice as well but — really? Hamilton? You could pay me to not see Hamilton!

But back to Mulberry. Ashley can’t buy it yet. He’s been snookered. I’m not sure for how long. Mulberry, like Burberry, is a British brand that has seen better times. It has been controlled by a distant billionaire family that doesn’t appear to understand how to run it properly (similar happened with Lanvin, which continues to languish).

I don’t know where Mulberry sits. It isn’t quite as tacky2 as Kate Spade or Coach, but it isn’t quite luxury in the full sense — its bags aren’t Bottega. For a long time this worked perfectly fine for them (I’m reminded of local brands like Yu Mei that occupy similar spaces) but if you want to charge luxury margins you need a luxury brand with a luxury perception. Otherwise, you’re just selling bags.

This brings us to Burberry & it’s similar-sized rivals — think Ferragamo, which I did a lot of work on a few years ago (the family dynamics at work there mean the co probably will never be sold — they can’t agree on anything) Your smaller houses competing against literal juggernauts out there — LVMH etc — my gut is there’s no point trying to compete in the same space — it’s more beautiful to be small and work for a space of power within that. Not everything needs to scale. Watching with interest — I suspect Ashley will get his bacon, one way or the other.

Burberry — mind you — still is sitting there on the market.

“Smart” Shares

I was brooding in bed last night thinking about the mediocrity of New Zealand versus the world. You get the feeling that if a revolution was called for in NZ, most people would sit at home, watching TV and the rugby3. Here’s the global innovation index, which ranks us in the middle of the pack (we’re just ahead of Cyprus and Malta).

No more so is our recent mediocrity present than a lot of decisions our listed companies make at corporate level (I say recent, because it hasn’t always been like this — I think you can draw a line from the silly policies of Roger Douglas to where we are now, with a government that appears to be run by a McKinsey think-tank).

For instance, here is the NZX’s ETF & passive wealth product, SmartShares’ new logo. They have recently rebranded to “Smart”.

I can’t help but note the similarities to the TradingView logo, too — there’s one or two:

I am not sure who designed the logo. It is resoundingly mediocre. It’s also baffling. What’s smart about a passive ETF product? If anything, passive indexing isn’t about being smart at all — it’s about being mediocre because by definition this is what an index is. There’s nothing wrong with that — most people underperform an index.

I’m also confused by the slogan: “the wise invest smart”. What does it even mean? How many times was this workshopped, by people “circling back” in meetings? It reminds me of the piss-take slogan in Succession — We hear for you:

Wise and smart are synonyms. You could say “the wise invest wise” or “the smart invest smart” or “the smarties invest with smarticles” or “smarties invest wisely” and so on. It doesn’t mean anything! It’s embarrassing! Smart’s CEO’s letter is also a masterclass in word salad:

Being Smart is aspirational, it will shape who we are and how we work alongside our customers and partners.

Aspirational how? What, exactly, are we aspiring to here?

Being Smart is learning from your own experiences and those of others

I believe we learn this in primary school. Yes, and?

Our next phase will bring SuperLife under the Smart brand, to consolidate a wide range of investment options from a single trusted source.

I have a pet hate for the phrase “single trusted source” — it is one step away from saying “single source of truth”.

Being Smart is our commitment to making investing easier to access and understand, no matter who you are or where you are on your investment journey.

I mean, I give up. This is very nice but you know, there’s a whole bunch of products in the world that make investing “easy to understand”. Nobody is trying to make it “hard to understand”.

I never understand why corporates insist on releasing word salad. Why not write something true and from the heart? It builds connection and fosters community. That’s important. On the other hand, a word salad letter just makes me shake my head and wonder what the brain trust at the NZX will do next.

Here’s what they could do next:

• Lower their ETF fees to be the lowest in the market. Currently their passive index-tracking products are not the lowest.

• Encourage more listings on the market, which means offering a compelling alternative to private equity.

• Not charge outrageous fees for basic things, like data.

I lobbied for a while for the NZX to sell off part of the Smart business — it would catalyse value. I don’t see that happening right now, because the revenue that side of the business makes is too important given that the exchange itself is moribund. So — if you are going to own a passive wealth product — at least be the best at it.

Not to labour the point — but is a logo like that, and a rebrand to “Smart”, really the best we can do here, NZX?

Melt ups be melting

Here is a funny stock. EVgo. EVgo makes charging stations for electric cars, and they lose a lot of money. They lose so much money because they are building more electric stations. More stations, more capex, yadda yadda. Up until yesterday it was a pretty good short because their model doesn’t really include making money, which (and I know this may come as a surprise), is largely the point of business. That all changed overnight, with the stock soaring +60% on the back of the Department of Energy in the US advancing them a $1bn loan. I want to insert a joke here about nobody expects the Spanish inquisition, but I’m not sure how to do that — open to suggestions.

I’ve been talking about the melt up for a bit now. People assume the Fed will keep cutting rates like the clappers and therefore, money will be cheap again. So you get stocks like EVgo — that maybe will never make money — and you have them melting up like crazy (it’s a dangerous time to be short). You can make money on the melt-up in a number of ways (none of this is fin advice, I am a lunatic at a keyboard):

• Buy calls on melt-up stuff, like the NASDAQ or Palantir (the resident guru Dylan and I did this; it’s going well).

• Long melt-up stocks, like Palantir, or do a screen for stocks that don’t make money and follow the monkeys that way.

• Reduce your short positions because your pants will be ripped off.

Is EVgo a good stock? Of course not. Will it probably need another capital injection? Probably. Is it going to melt-up, because the General Dynamic Theory of Monkeys in Markets dictates so? Again — probably.

You gotta melt up before you melt down.

Odds & Sods —

I saw the new Joker movie in the weekend. It is a musical. It is good in spite of that — and I hate musicals. The ending is a little weak. If you are expecting to see a cinematic masterpiece you ought to go somewhere else. If you a maniac, like I am, and you are not wed to the comics or the DC cinematic universe, then you might like it too.

I kept thinking about the relatively disappointing Paris Butter and how it compares to the city’s other establishments. I.e Culprit is fabulous — and doesn’t take itself too seriously — while Onslow makes you feel enveloped by a lovely velvet blanket. The Somm at Paris Butter, I found, was fairly full of himself in a way that made me wonder if he had mistook himself for a rock star or local celebrity4 (he’s no Wayne Anderson). In terms of fine dining power rankings I am thinking it is a little like this:

1. Culprit

2. Onslow

3. Cocoro

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