Mulberry half-year losses widened as its new CEO highlighted the “clear need to reprioritise and rebuild the business”.
The luxury brand’s losses swelled to £15.7m for the 26 weeks ended 28 September, compared to £12.8m in 2023, as sales plunged 19% to £56.1m.
CEO Andrea Baldo noted: “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…
“We are now working on initiatives to renew the brand’s relevance, initially for UK consumers and then for our international audience.”
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The retailer has taken “decisive steps to streamline operations, improve margins, reduce working capital, and strengthen our cash position” in response to the current market conditions.
Baldo said it had started “reviewing its internal team structure”. It has also “made strategic adjustments” to its product, pricing, and distribution strategies.
The retailer is set to cut a quarter of its head office staff, according to The Guardian.
The results come amid wider struggles for the luxury market, with Burberry profit plunging 36% earlier this year as it grappled with a challenging economic environment.
Last month, Mulberry fought off a takeover approach by Mike Ashley’s Frasers Group, its second largest shareholder.
The Sports Direct owner, which holds a 37% stake in the luxury retailer, had submitted a revised cash bid earlier this month, offering 150p per share, which valued the business £111m.
But Mulberry’s board deemed the offer “untenable” after majority shareholder Challice, which owns 56%, said it had “no interest in either selling its Mulberry shares to Frasers or providing Frasers with any irrevocable or other undertaking with regards the possible offer”.
Frasers described the decision as a “disappointing outcome” and added that it had “become increasingly concerned over the governance of Mulberry, the apparent lack of a commercial plan against a backdrop of increasing market headwinds, and critically, the financial position in which Mulberry currently finds itself”.
Despite dropping its bid, the group has called for the appointment of a Frasers representative to the Mulberry board.
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