“We lost it 10 years ago when we raised prices”. The phrase comes from Andrea Baldo, CEO of Mulberry. Who is now reducing them so that the British brand can carve out its slice of the market in the space left empty by luxury, the one around 800 to 1,500 euros for a leather handbag.
Mulberry’s plan
Baldo’s plan should set Mulberry to turn a profit by 2027 and increase revenue from £152.8 million in 2024 to £200 million within a few years. Among the various actions put in place by the CEO, the most impactful is a refocusing of selling prices. And for many products, it means a reduction in the price tag. An opposite action to what luxury brands have been doing in recent years. “This has created a huge gap for brands like ours”, Baldo says. Mulberry is indeed positioned in the entry-level luxury category.
Value for money
Its bags cost, on average, about 1,200 euros. Baldo believes that “the price position we have today is perfect” because “they are much more affordable than other luxury brands”. The CEO himself recalled how the brand experienced strong growth after the 2008 financial crisis precisely because it offered “excellent value for money“, compared to other brands. And that is where Baldo wants to go back to, since “luxury has gone up in price so much. We just need to make the brand more ‘hot’ and relevant again”.
Gateway to luxury
This is all because Mulberry is a brand that is seen by consumers as a gateway to luxury. “This was Roger Saul’s (Mulberry founder Ed.) idea from the very beginning. We lost it 10 years ago when we suddenly raised prices”, Baldo told Drapers. Ten years ago Mulberry raised prices because it aspired to climb steps to become a luxury brand. A decision that caused a nasty fall, and one that Baldo is trying to reverse. The dangers that Mulberry’s CEO sniffs out come from the lower segment. Where there are a lot of brands (even quite recent ones) selling bags in the 300 to 600 euro price range. And they aspire to grow. It should be noted, as Business of Fashion reports, that the brand produces 40% of its bags in Somerset and the remaining 60% in Turkey.
Mulberry images
Read also:
- “We asked too much of customers”: Mulberry’s mea culpa
- Why so many rumors? Because no one believes that Burberry will save itself
- Tapestry-Capri and Mulberry deal failures will have consequences
