Mulberry vows to sell more bags in UK as it looks to 'simplify' business model
Mulberry vows to sell more bags in UK as it looks to 'simplify' business model
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Mulberry, the luxury bag maker that has been struggling recently, has admitted to failing to connect with its British customers in recent years. The company now plans to focus more on selling bags in the UK rather than China, in an effort to return to profitability. Chief executive Andrea Baldo said that Mulberry has lost so much business in the UK that there is a huge opportunity for growth. Despite being renowned for its luxury leather handbags since its establishment in Somerset in 1971, Mulberry's profits have taken a hit due to a decrease in demand for luxury goods among Chinese consumers, who were once a crucial market for the fashion firm.
Mr Baldo revealed that the company will shift its focus away from China, closing 12 stores across Asia while planning to open more outlets in UK cities. It also plans to re-enter the wholesale and outlet sales markets, including new deals to sell its products at John Lewis and Flannels. Despite having no presence in Birmingham or Liverpool, Mulberry aims to expand into these cities. This UK expansion comes as retailers like Marks & Spencer warn of rising company taxes and falling consumer sentiment impacting their domestic market.
However, Mr Baldo believes that with the right product, distribution and communication, they can take advantage of the UK market regardless of economic conditions. Mulberry's new chief, Mr Baldo, who hopped over from Ganni last year, is on a mission to amp up the brand's "Britishness" and "cultural relevance". He's also keen on streamlining operations to tackle the dip in profits. He laid out plans to cut costs by 25% compared to the previous financial year after what he calls a period of "suboptimal" performance. With ambitions to grow stateside, Mulberry's still reeling from a tough Christmas season, with revenues down nearly 20% from the year before, and Asia feeling the pinch even more with a 28% sales nosedive.
However, the US saw an 11% uptick in sales. Mr Baldo said: "We need to get back to where we came from and return to the spirit of Mulberry." He insists on simplifying the business model for success. Mulberry already announced plans to slash roughly 85 jobs, about one quarter of its workforce, before Christmas. The turnaround plan comes after loss-making Burberry also said it would focus more on its British history to make more sales.
