Mulberry in crisis cuts jobs and prices because it “asked too much of customers. The first half of the year results show a clear need to reprioritise and rebuild the business”, says CEO, Andrea Baldo. Hence two decisions. The first, painful: to lay off 85 of the 350 employees. The second, inevitable: to lower the average price of its proposal.
Merciless numbers
The contours of Mulberry’s crisis were defined by the figures for the first half of its financial year, from April to September 2024. Revenues fell by 19% to GBP 56.1 million. Pre-tax loss increased from GBP 12.3 million in Q1 2023 to GBP 15.3 million. It was not enough to reduce operating expenses by 16%. In the half-year, the British company also raised GBP 10.4 million by selling shares and increased its debt lines to support the restructuring plan (source: Vogue Business). “I am convinced we are making the right moves to return Mulberry to profitability”, Baldo said.
“We have asked too much of customers”
Among the British brand’s strategies is to cut 85 job positions, affecting about a quarter of its employees, as the BBC points out. The layoffs mainly involved the design headquarters in London, as well as some employees in the Somerset offices. But there is also the strategy of reducing the average price of products to try to increase sales. “We asked a bit too much of the customer”, the CEO told Bloomberg News.
Mulberry’s best-selling product is the Bayswater bag (pictured from mulberry.com) which has an average price of GBP 1,095. Baldo’s aim is to sell most of its luxury bags at a lower price. The CEO wants to reduce the cost of other products so that 60 per cent of the retail offering costs less than Bayswater. Among the various “right moves” is that, a month ago, he rejected a GBP 111 million takeover offer made by Frasers Group, which already holds about 37% of the company’s shares.
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