Luxury fashion brand Mulberry has announced a significant restructuring plan after reporting a 19% drop in group revenues to £56.1 million for the six months ended September 28.
Newly appointed CEO Andrea Baldo revealed that 85 positions – around a quarter of the company’s 350 employees – have been cut as part of efforts to “rebuild the business” amid challenging market conditions.
The job losses mainly 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 revenue from its wholesale and franchise business plummeting 46% to £5.4m due to reduced orders from partners in Italy and Denmark.
UK revenues also fell 14% to £31.3m, attributed to “low consumer confidence”. Pre-tax losses for the period widened to £15.7 million, compared with a loss of £12.8 million a year earlier.
Mulberry is among a number of luxury retailers hit hard by a global decline in luxury spending. The company’s restructuring comes a month after Mike Ashley’s Frasers Group – which holds a 37% stake in Mulberry – abandoned plans for a £111 million takeover bid.
In a statement to shareholders, Baldo acknowledged the significant challenges facing the sector: “There is no doubt that our industry is facing a period of significant uncertainty, driven by a challenging and volatile macroeconomic environment that is affecting consumer confidence in several markets influences, especially in our home country.”
Despite the setbacks, Baldo expressed his confidence in the future of the company: “With the teams’ efforts in cost savings, a strengthened balance sheet, a renewed ‘brand first’ approach and a renewed business strategy – the details of which I can share will share in due course. “I am convinced that we are taking the right steps to make Mulberry profitable again.”