The extent of the challenge facing new Mulberry CEO Andrea Baldo was laid bare today as the British luxury brand revealed its first-half earnings.
Revenue fell 19 per cent year-on-year to £56.1 million in the 26 weeks ended 28 September, and Mulberry’s underlying loss before tax widened to £15.3 million from £12.3 million during the same period in 2023.
“The first-half results illustrate the clear need to reprioritise and rebuild the business,” said Baldo in a statement. The executive was appointed in July following his exit from Ganni, where he had been CEO since 2018. “Mulberry is an iconic brand. It stands out for its rich heritage and craftsmanship — qualities that our customers recognise and value deeply. Combined with our unique position in the market — offering responsible luxury products of unmatched quality and longevity, crafted in our Somerset factories — 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.”
Mulberry’s UK retail sales were down 14 per cent year-on-year to £31.3 million in the first half of 2024. Total international retail sales were down 17 per cent to £19.5 million, driven by a 31 per cent slump in Asia-Pacific to £9.3 million, which was only partially offset by a 2 per cent increase across other markets.
Highlights during the period included collaborations with London-based designer Rejina Pyo and Italian luxury brand Eleventy, as well as the launch of the Soft Bayswater and Islington Bucket bags, which Mulberry said have been well received by customers. It also achieved B Corp certification in September 2024.
Mulberry reduced its operating expenses by 16 per cent to £50.7 million during the half, but its gross margin slipped to 67 per cent from 70 per cent the year prior. Full-price sales represented 78 per cent of the total, up very slightly from 77 per cent in 2023. It raised £10.4 million during the period by selling off shares, and increased its debt facilities to support the turnaround plan.
Today’s earnings update comes weeks after Mulberry’s board rebuffed a takeover offer from its significant minority stakeholder Frasers Group. Frasers, which has a 37 per cent stake in the brand, had voiced concerns about its governance and financial position. However, Mulberry said the offer did not recognise its “substantial future potential value”. On 23 October, Frasers said it had decided not to make a formal offer for the brand, but that it “continues to believe that market headwinds, and a clear lack of commercial plan, place the company in a very difficult financial position”.
Baldo’s focus now is on returning Mulberry to profitability by making the brand more operationally efficient and improving the product, pricing and distribution.
“In response to current market conditions, we have taken decisive steps to streamline operations, improve margins, reduce working capital and strengthen our cash position,” said Baldo. “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.”
The brand warned that the wider macroeconomic environment, including ongoing inflationary pressures, continues to present uncertainty and challenges.
“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,” he said. “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.”
Comments, questions or feedback? Email us at feedback@voguebusiness.com.
More from this author:
Phillip Lim exits namesake brand
‘This is what we know will sell’: How Alice Temperley bounced back
