British luxury handbag maker Mulberry is set to reduce its head office workforce by 25 percent following a notable decline in sales and increased financial losses.
The company reported a 19% drop in revenues, totaling £69.7 million, for the six months ending in September, with losses widening by 23% to £15.7 million.
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Key Developments
- Job Reductions: Mulberry plans to eliminate 85 positions from its 350 corporate staff, primarily affecting its Kensington, London headquarters. Some international corporate roles and positions at its Somerset factory will also be impacted. However, jobs on the factory floor and in retail stores will remain unaffected.
- Leadership Changes: Andrea Baldo, who assumed the role of CEO in September, is spearheading a review aimed at creating a “leaner, more agile organization.” Baldo emphasized the necessity to “reprioritize and rebuild the business” in response to the recent financial results.
- Market Challenges: The UK market, accounting for over 60% of Mulberry’s total revenues, continues to face challenges due to low consumer confidence. Year-on-year, UK revenues fell by 14% to £31.2 million, with store sales decreasing by 17% and online sales by 8%.
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CEO Andrea Baldo said:
“In response to current market conditions, we have taken decisive steps to streamline operations, improve margins, reduce working capital and strengthen our cash position,” he said.
“This has also meant reviewing our internal team structure to ensure we become a leaner, more agile organisation. Additionally, we’ve made strategic adjustments to our product, pricing, and distribution strategies, and we’ve begun discussions with luxury wholesale partners to ensure we are present wherever our customers shop.”
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Mulberry’s Future
Mulberry’s leadership is focusing on renewing the brand’s relevance, initially targeting UK consumers before expanding efforts internationally.
The company aims to adapt to current market conditions by streamlining operations and enhancing its appeal to a broader customer base.
These strategic decisions underscore Mulberry’s commitment to navigating the evolving retail landscape and addressing the financial challenges it currently faces.
