Mulberry faces intensified half-year losses as the luxury brand’s new CEO focuses on revitalisation.
- Losses have escalated to £15.7m, marking a significant increase from the previous year’s £12.8m.
- Sales declined by 19%, falling to £56.1m, prompting a need for immediate strategic adjustments.
- The CEO, Andrea Baldo, in his brief tenure, has emphasised the urgency to reposition and rebuild.
- Strategic measures are being put in place to streamline operations and address market challenges.
Mulberry, a renowned name in the luxury fashion sector, has reported exacerbated financial losses for the first half of 2024, amounting to £15.7m, an increase from £12.8m in 2023. This downturn has been driven by a 19% decrease in sales, which totalled £56.1m over the same period. The firm is grappling with the challenges of a weakened luxury market, a situation that is echoed by similar struggles faced by other industry players like Burberry.
At the helm for less than three months, CEO Andrea Baldo acknowledges the pressing necessity to reposition the brand in a bid to renew its appeal, initially within the UK market and subsequently on a global scale. Baldo stated: “Though I’ve only been in the role of CEO for under three months, the first half results illustrate the clear need to reprioritise and rebuild the business.” The company’s plans are focused on a strategic overhaul involving streamlining operations, enhancing profit margins, and bolstering cash reserves.
Mulberry’s proactive response to these economic headwinds includes a review of its internal team structure, potentially leading to job reductions. In parallel, strategic adjustments are being made to its product lineup, pricing model, and distribution methods. These initiatives aim to strengthen Mulberry’s financial resilience and operational efficiency amidst prevailing market difficulties.
A potential acquisition by Mike Ashley’s Frasers Group has been rebuffed by Mulberry’s majority shareholder, Challice, who holds a 56% stake. Despite Frasers Group’s revised offer, valuing the company at £111m, this approach was categorically rejected, with Challice expressing no interest in divesting its shares. Consequently, tensions have arisen concerning Mulberry’s strategic direction and governance, as Frasers demands board representation to safeguard its 37% stake in the company.
Mulberry’s current challenges underscore the brand’s urgent need for a strategic renovation to secure its position in the luxury market.
