Simplification as Key: Mulberry's New CEO Focuses on Streamlining

The fresh wind at the leadership level of Mulberry, the British luxury handbag manufacturer, aims to reverse the trend by simplifying the business model. After a revenue decline of one-fifth and a widened loss, the company faces challenges that require strong countermeasures. The half-year figures up to the end of September clearly show: Revenue fell by 19 percent to 56 million pounds, and the pre-tax loss increased to 15.7 million pounds from 12.8 million pounds in the previous year. Andrea Baldo, who has been in office for less than three months and is the head of the company, describes the determined steps that must now follow as necessary: streamlining operations, improving margins, reducing the use of working capital, and strengthening liquidity reserves are on the agenda. The product range, pricing policy, and distribution channels are being examined to adapt the brand to customers' consumption habits. The focus is on negotiations with resellers to ensure product visibility. The difficult and unstable macroeconomic context, which particularly burdens consumer confidence in the UK, is showing its impact. Luxury manufacturers worldwide are facing a decline in consumer enthusiasm. Recently, Mulberry rejected a takeover bid from its second-largest shareholder, the Frasers Group. The majority shareholder Challice, with 56.4 percent owned by billionaire Ong Beng Seng and his wife Christina, is not ready to sell. Furthermore, Mulberry announced that 824,000 pounds in severance payments were due in the first half of the year. A strategic business review is to be completed by December, with details to follow in due course. In the largest market, the UK, revenue fell by 14 percent to 31.2 million pounds during this period. In the Asia-Pacific region, sales decreased by 31 percent to 9.3 million pounds, primarily due to cautious buying behavior in China and South Korea, where retail sales plunged by 52 and 29 percent, respectively. Nonetheless, Australia recorded a slight increase of 3 percent compared to the previous year.