Mulberry: Luxury brand looks to turnaround ‘sub-optimal’ performance
British luxury plan Mulberry has unveiled a turnaround plan aimed at rescuing the retailer from a period of decline.
This comes after its share price has fallen 17 per cent in the last month and more than 30 per cent in the last year.
Revenue for the last quarter of the year fell 18.3 per cent year on year, driven by a 20 per cent drop in UK retail sales and a 27.9 per cent drop in Asia Pacific retail sales.
Mulberry was the target of two consecutive takeover bid by Mike Ashley’s Frasers last year, although the luxury firm slammed both bids as too low and the offer was abandoned amid governance concerns .
However, Frasers’ concern that the brand was “going the same way as Debenhams” was echoed by analysts. AJ Bell investment director Russ Mould said “was right” when it implied that Mulberry “was in a mess.”
Recognition of “sub-optimal” performance
Mulberry said it “recognised that the company’s recent performance has been sub-optimal”, and offered up a new strategy, “Back to the Mulberry Spirit”.
The brand said it will focus on three core goals: simplification, brand refresh and customer connection.
These goals include a focus on the UK and US markets rather than China, increased customer personalisation and in-store experience, and a new creative team.
“Our new strategy sets out our commitment to turnaround this business and return to sustainable profitability,” chief executive Andrea Baldo said. “We need to get back to where we came from and return to the spirit of Mulberry.”
“For Mulberry to succeed, the business model needs to be simplified – including re-prioritising the UK and taking a channel agnostic approach – while also ensuring we lead with creativity to reignite brand desirability and deepen connections with our customers,” he added.
Billie O’Connor, who is set to join Mulberry as its new CFO, said the turnaround plan is “clear” with “ambition for the future”.
In early trades, Mulberry’s shares dropped by 7.69 per cent.