Struggling British handbag brand Mulberry is aiming to return the brand to profitability after its new chief executive, Andrea Baldo, fended off a takeover bid from Mike Ashley’s Frasers Group. The company plans to cut around a quarter of its roles, the BoF has learned.
The layoffs, announced Thursday inside City Hall, will affect about 85 jobs worldwide. The job cuts are focused on the company’s 350-strong corporate team and do not affect its factories, retail stores or warehouses. These are the first steps in a broader strategic reset expected to be announced by the end of the year.
“The business strategy is clearly not paying off,” Bardo said in an emailed statement. “To return Mulberry to profitability, it is essential that our team is set up for success and able to move with agility and pace.”
Bardo has been in a baptism of fire since taking over from longtime CEO Thierry Andretta in early September. Former CEO Ghani was brought in to help turn around the struggling bag maker, but within weeks Mulberry’s second-largest shareholder, Frasers Group, took action on the business.
The British group has emerged as an aggressive and ruthless activist in the UK retail industry since the pandemic. For example, the company placed luxury e-commerce site Matchesfashion into administration just months after acquiring it earlier this year. Frasers made a series of offers for Mulberry last month, culminating in a bid earlier this week that valued the bag brand at 111 million pounds ($144 million).
Mulberry’s board called the offer “unacceptable”, citing a lack of support from an investment vehicle owned by its largest shareholder, Singaporean billionaire Ong Bentsen and his wife Christina. refused as such. The company’s 56% stake means it can block any deal.
Frasers Group ultimately pulled out of the takeover plan on Wednesday in a barbed farewell. “Frasers continues to believe that market headwinds and a clear lack of commercial planning have left the company in a very difficult financial position,” the company said in a statement. Statement to investors. The group said it would continue to provide “long-term support” for the brand, but called on Mulberry to present a “credible plan for the short term” and to join the company’s board of directors.
In an emailed statement, Bardo said the company has already taken “swift and decisive action to put the group on a stronger financial footing.” The company raised around £11m through a share issue last month and has taken steps to reduce inventory and streamline operating costs. Still, Bardo faces a long road to repositioning the brand for growth in a difficult market.
Mulberry embraced the Millennial moment in the late 2000s and early 20s, when hit bags such as the slouchy Alexa Satchel (named after British IT girl Alexa Chung) drove sales. . But it has been in decline over the past decade, struggling to maintain its presence and compete in global markets, especially after Brexit. The company slumped to an annual pre-tax loss of £34m in the last financial year as the broader luxury goods recession weighed on sales. The company’s stock price has fallen nearly 40% in the past 12 months.
Bald, who presided over a period of international expansion and growth for contemporary Danish brand Ganni, is expected to focus on restoring the brand’s enthusiasm, while leaning into Mulberry’s heritage and contemporary price point.