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The new boss of British luxury handbag maker Mulberry has said he will simplify the business as part of his plan to turn it around, after sales fell by a fifth and losses widened.
Revenues at Mulberry fell 19 per cent to £56mn in the six months to September 28. Its loss before tax was £15.7mn, compared with £12.8mn in the same period last year.
Chief executive Andrea Baldo, who has been in post for less than three months, said: “In response to current market conditions, we have taken decisive steps to streamline operations, improve margins, reduce working capital, and strengthen our cash position.”
He added that the brand would alter its product line-up, prices, and distribution, and was in talks with wholesalers “to ensure we are present wherever our customers shop”.
The “challenging and volatile macroeconomic environment” was affecting consumer confidence, particularly in the UK, Baldo said. Brands across the globe have had to contend with a slowdown in luxury spending.
The comments came after Mulberry recently rejected a takeover approach from its second-largest shareholder Frasers Group. Its majority owner Challice, which has a 56.4 per cent stake and is controlled by billionaire property tycoon Ong Beng Seng and his wife Christina, said it was not interested in selling.
On Tuesday, Mulberry said it had incurred £824,000 in redundancy costs in the half year. It added that a strategic review of the business would be finished in December and it would provide more details at a later date.
Sales in the UK, its largest market, fell 14 per cent to £31.2mn during the period. In the Asia Pacific region sales were down 31 per cent to £9.3mn — mainly because of a slowdown in China and South Korea, where retail purchases were down 52 and 29 per cent respectively. However, retail sales in Australia were up 3 per cent on the same period last year.