Will Mulberry Turn a New Leaf Under CEO Andrea Baldo?

Mulberry, the British luxury brand, is cutting a quarter of its head office staff in London as part of incoming CEO Andrea Baldo’s strategy review of the company. 

The leather goods maker is cutting 85 roles from the 350 staff employed in corporate functions, mostly at its London headquarters but also internationally. Mulberry has offices in Paris, New York, Hong Kong, Tokyo and Seoul.  

Mulberry installed Baldo as its new CEO in September and he has been reviewing the company’s team structure to make “a leaner, more agile organisation”.

Mulberry has announced group sales fell by 17% in the six months to end-September, with revenue falling by 19% to £56.1m from £69.7m last year. 

Like other luxury brands including Burberry and Gucci, Mulberry has faced weak demand from China, which accounts for one third of all luxury goods sales worldwide. 

Mulberry sales in Asia fell by 31% in the half-year.

Mulberry’s share price has fallen by nearly 28 per cent in the year to date.

“Though I’ve only been in the role of chief executive for under three months, the first-half results illustrate the clear need to reprioritise and rebuild the business,” Baldo said. “We are now working on initiatives to renew the brand’s relevance, initially for UK consumers and then for our international audience.”

Mulberry cut operating expenses by 16% – or £10m – in the half-year, but this was not enough to offset reduced revenue, and the firm reported an underlying loss before tax of £15.3m.

How Andrea Baldo plans to save Mulberry

Baldo said Mulberry had taken decisive steps to streamline operations, improve margins, reduce working capital and strengthen its cash position.

Not only did this mean reviewing internal team structure to ensure a leaner, more agile organisation, Baldo said, but Mulberry has also cut pricing, reviewed distribution strategies and begun discussions with wider luxury wholesale partners. 

Baldo, who has over 20 years experience in the fashion industry, was hired in July to turn the struggling company around.

“Mulberry is an iconic brand. It stands out for its rich heritage and craftsmanship – qualities that our customers recognise and value deeply… 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,” Baldo added.

Earlier this month, Mulberry rejected two offers from shareholder Frasers group, which holds a 37% stake in Mulberry. Frasers boss Mike Ashley then walked away from the deal, citing unhappiness with the management. 

Baldo said: “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.”

Mulberry began life in 1971 in Somerset, where it still has its factory. Famous names seen sporting Mulberry handbags include Rihanna, Keira Knightley and the Princess of Wales. 

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