The boss of Mulberry has said he needs to “rebuild the business” as the luxury handbag maker revealed that sales plunged by almost a fifth over the past half-year.
The fashion brand also said it is completing an internal review, with the aim of creating a “leaner” operation.
The Somerset company, which was recently the target of takeover efforts by shareholder Frasers Group, is among firms to have been hit hard by a sharp slowdown in luxury spending.
Mulberry told shareholders that group revenues fell by 19% to £56.1 million for the six months to September 28.
It said trading was challenging over the half-year in the face of a “difficult trading environment and uncertain macroeconomic trends”.
Though I’ve only been in the role of CEO for under three months, the first-half results illustrate the clear need to reprioritise and rebuild the business
Andrea Baldo
Revenues from its wholesale and franchise business dived by 46% to £5.4 million as it was particularly affected by partners in Italy and Denmark reducing their orders due to tough conditions.
Elsewhere, sales in its Asia Pacific division slid by 31% to £9.3 million as it was impacted by weakness in China and South Korea.
Meanwhile, UK revenues fell by 14% to £31.3 million amid “low consumer confidence”.
It also saw pre-tax losses widen to £15.7 million for the period, compared with a £12.8 million loss a year earlier.
Andrea Baldo, chief executive officer of Mulberry, said: “Though I’ve only been in the role of CEO for under three months, the first-half results illustrate the clear need to reprioritise and rebuild the business.
“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.”
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 of Mulberry.