The new boss of Somerset-based fashion house Mulberry has said he is working to “renew the brand’s relevance”, including selling most of its iconic luxury bags for just under £1,100.
Andrea Baldo, who took over as CEO in July, spoke as Mulberry’s revealed widening losses on declining sales.
The firm, which has manufacturing sites at Chilcompton, south of Bath, and in Bridgwater, has endured a tough few years, with even its high-end customers cutting back on spending on luxury items while buyers on more modest incomes have been squeezed by the cost of living crisis.
Mulberry’s travails have also been brought into sharp focus by UK retail giant Fraser Group’s failed efforts to take it over.
Andrea Baldo, pictured, the former boss of Danish womenswear label Ganni, replaced previous CEO Thierry Andretta, who had been in the role for nine years ago but had overseen no real restoration in Mulberry’s fortunes.
Earlier this week Mulberry’s results for the 26 weeks ended 28 September showed group revenue was down 19% to £56.1m with an underlying pre-loss of £15.3m, against £12.3m last time.
UK retail sales decreased by 14% to £31.3m while Asia Pacific sales were 31% lower at £9.3m, reflecting a slowdown in its important Chinese market.
Total International retail sales decreased 17% to £19.5m, with the reduction in Asia Pacific partially offset by a 2% increase in the rest of world.
In comments accompanying the financial results, Mr Baldo said they “illustrated the clear need to reprioritise and rebuild the business”.
He added: “Mulberry is an iconic brand. It stands out for its rich heritage and craftsmanship – qualities that our customers recognise and value deeply.
“Combined with our unique position in the market, offering responsible luxury products of unmatched quality and longevity, crafted in our Somerset factories,
“Mulberry truly is one of a kind. We are now working on initiatives to renew the brand's relevance, initially for UK consumers and then for our international audience.”
He said in response to current market conditions, the firm had taken decisive steps to streamline operations, improve margins, reduce working capital and strengthen its cash position.
“This has also meant reviewing our internal team structure to ensure we become a leaner, more agile organisation,” he added.
“Additionally, we’ve made strategic adjustments to our product, pricing and distribution strategies, and we’ve begun discussions with luxury wholesale partners to ensure we are present wherever our customers shop.
"There is no question that our industry is facing a period of significant uncertainty, driven by a challenging and volatile macroeconomic environment that is impacting consumer confidence in several markets, particularly in our home country.
“However, with the teams’ efforts on cost-cutting, a strengthened balance sheet, a renewed brand-first approach and a refreshed business strategy – details of which I'll share in due course – I am confident we are making the right moves to bring Mulberry back to profitability.”
In an interview with Bloomberg News he said he was trying to bring down the cost of Mulberry’s products so that 60% of the range sold for less than its flagship Bayswater bag, which retails at £1,095.
London Stock Exchange-listed Mulberry’s shares have slumped by around 70% since 2021 and in May they fell to their lowest level for 14 years after the firm warned that its well-heeled customers were continuing to cut back on spending.
The group employs around 1,400 people across the globe and has offices in London, Paris, New York, Hong Kong, Tokyo and Seoul as well as its headquarters at Chilcompton.
Its two Somerset factories, which between them produce more than half its total output, have benefitted from new investment over recent years.
