Mulberry reports increased losses, prompting strategic changes.
- Losses for Mulberry have risen to £15.7m from £12.8m last year.
- Sales have dropped by 19% to £56.1m.
- New CEO Andrea Baldo emphasises the need to rebuild.
- Mulberry resists a takeover bid from Frasers Group.
Mulberry has reported a notable increase in losses for the first half of the financial year, amounting to £15.7 million, compared to £12.8 million in the previous year. This financial downturn is partly attributed to a 19% decline in sales, which now stand at £56.1 million.
Andrea Baldo, who has recently taken on the role of CEO, highlighted the pressing requirement to readjust and revitalise the brand’s strategy, focusing initially on the UK market before expanding efforts internationally. He 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.”
Mulberry has begun taking decisive actions in response to challenging market conditions. These measures include streamlining operations, improving profit margins, reducing working capital, and enhancing the company’s financial standing. In light of these changes, there might be an impact on employment as the internal team structure undergoes review.
Furthermore, the company has adjusted its product, pricing, and distribution strategies to align better with current market demands. These strategic alterations are seen as necessary amid the broader difficulties facing the luxury market, exemplified by Burberry’s 36% profit slump earlier this year.
Adding to the company’s challenges, Mulberry successfully resisted a takeover attempt by Frasers Group, which is its second largest shareholder owning a 37% stake. The board rejected the 150p per share cash bid, valuing the company at £111 million. Challice, the majority shareholder with a 56% stake, expressed no interest in selling its shares, leading Frasers to express disappointment and concern over Mulberry’s governance and financial strategy.
Mulberry is undergoing strategic changes to address financial challenges while resisting takeover attempts.
