Luxury fashion brand Mulberry has announced a significant restructuring plan after announcing a 19% drop in group revenues to £56.1 million for the six months to September 28.
Newly appointed CEO Andrea Baldo revealed 85 jobs – nearly a quarter of the company’s 350-person workforce – were being cut as part of efforts to “rebuild the business” amid difficult market conditions.
The job cuts mostly affect staff at Mulberry’s design headquarters in London and some office workers in Somerset. The company cited a “difficult trading environment and uncertain macroeconomic trends” impacting sales, with revenues from its wholesale and franchise business falling 46% to £5.4m due to lower orders from partners in Italy and Denmark.
UK revenues also fell by 14% to £31.3 million, due to “lower consumer confidence”. Pre-tax losses widened to £15.7m during the period, compared to a loss of £12.8m the previous year.
Mulberry is among several luxury retailers hit hard by the global decline in spending on luxury goods. The company’s restructuring comes a month after Mike Ashley’s Frasers Group – which owns a 37% stake in Mulberry – abandoned plans to make a £111m takeover bid.
In a statement to shareholders, Baldo acknowledged the significant challenges facing the industry: “There is no doubt that our industry faces a period of significant uncertainty, driven by a challenging and volatile macroeconomic environment that is impacting consumer confidence in many markets, particularly in our home country.”
Despite the setbacks, Baldo expressed confidence in the company’s future: “Thanks to the team’s efforts to reduce costs, strengthen the balance sheet, a renewed brand-first approach and an updated business strategy – the details of which I will share in due course” – I am confident that we are taking the right steps. To return Mulberry to profitability.”