Mulberry cuts jobs in Somerset in ‘rebuild’ after sales plunge

Mulberry cuts jobs in Somerset in ‘rebuild’ after sales plunge

PA

The fashion brand said it is completing an internal review, with the aim of creating a “leaner” operation

The boss of luxury retail company Mulberry says he needs to “rebuild the business”, after sales dropped by almost a fifth in the past six months.

The Somerset-based designer company told shareholders group revenues fell by 19% to £56.1m in the six months prior to 28 September.

It added sales were challenging in the face of a “difficult trading environment and uncertain macroeconomic trends”.

Newly appointed CEO, Andrea Baldo, says he has a “refreshed business strategy” and has cut 85 roles as part of the shake-up.

The cuts, which impact about a quarter of its 350-strong workforce, have predominantly impacted its London design headquarters, as well as some Somerset office workers.

Mulberry is among several firms to have been hit hard by a sharp decline in luxury spending worldwide.

Revenues from its wholesale and franchise business dropped by 46% to £5.4 million, as it was particularly affected by partners in Italy and Denmark reducing their orders due to tough conditions.

Meanwhile, UK revenues fell by 14% to £31.3 million amid “low consumer confidence”.

The company also saw pre-tax losses widen to £15.7 million for the period, compared with a £12.8 million loss a year earlier.

It comes a month after Mike Ashley’s Frasers Group – which owns a roughly 37% stake in the company – ditched plans for a £111 million takeover offer.

Mr Baldo said: “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.

“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.”

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