Luxury fashion brand Mulberry has announced a major restructuring plan after reporting a 19% drop in group revenue to £56.1 million in the six months ending 28 September.
Newly hired CEO Andrea Baldo revealed that 85 roles—about a quarter of the company’s 350 employees—were cut as part of efforts to “rebuild the business” amid challenging market conditions.
The job cuts mainly affect staff at Mulberry’s headquarters in London and office staff in Somerset. The company cited a “difficult trading environment and uncertain macroeconomic conditions” as affecting sales, with revenue from its wholesale and franchise business falling 46% to £5.4 million due to reduced orders from partners in Italy and Denmark.
UK revenue also fell by 14% to £31.3 million, due to “low consumer confidence”. Pre-tax losses widened to £15.7 million in the period, compared with a loss of £12.8 million last year.
Mulberry is among the few luxury stores that have been hit the hardest in the world for luxury spending. The company’s restructuring comes a month after Mike Ashley’s Frasers Group—which owns a 37% stake in Mulberry—dropped plans for a £111 million takeover bid.
In a statement to shareholders, Baldo acknowledged the key challenges facing the industry: “There is no doubt that our industry is facing a period of great uncertainty, driven by a challenging macroeconomic environment that affects consumer confidence in many markets, especially in our country.”
Despite the setbacks, Baldo expressed confidence in the company’s future: “With the teams’ efforts to reduce costs, a strengthened balance sheet, a renewed approach to start-up and a renewed business strategy—details that I will share later. -I hope we are taking the right steps to return Mulberry to profitability.”
