Mulberry, a well-known name in luxury fashion, finds itself navigating turbulent waters as discussions to raise over £20 million in new funding unfold. The brand, cherished for its craftsmanship, is currently facing widening losses amid a challenging retail landscape. For the fiscal year ending March 29, it anticipates an underlying pre-tax loss of around £23 million—slightly more than last year’s loss of £22.6 million. Additionally, revenues are projected to dip by 21%, retracting to an estimated £120 million.
In a bid to secure a more stable financial future, Mulberry is in talks with significant stakeholders, including its majority shareholder Challice, run by Singaporean entrepreneur Christina Ong and her husband Ong Beng Seng, as well as major investor Mike Ashley’s Frasers Group. The company’s board has voiced that this additional capital is crucial not just for survival but as a cornerstone for supporting Mulberry’s growth strategy and achieving financial objectives.
The leadership of Chief Executive Andrea Baldo, who stepped into the role last September after a tenure at Ganni, is pivotal to this turnaround effort. Baldo is focused on reinstating profitability and elevating gross margins, laying the groundwork for a revitalized Mulberry. Her management strategy includes streamlining operations by cutting costs, restructuring the headquarters, and closing unprofitable stores. In a significant move last year, around 85 jobs were cut primarily from the company’s headquarters as part of this restructuring.
“In the near term, we are firmly in turnaround mode,” Baldo stated, exuding confidence about the path ahead. “Following our year-end review, the board and I are optimistic that, with this additional funding, we can pick up pace and meet our targets quicker than anticipated.” It’s a rallying call in a moment that necessitates both resilience and innovation.
Alongside these financial maneuvers, Mulberry is recalibrating its market focus. The brand is shifting away from its footprint in China, with plans to close 12 stores across Asia, while also looking to expand into key UK cities with new locations. It’s a strategic pivot aimed at harnessing local demand and aligning product offerings more closely with consumer preferences.
The goal is to finalize the fundraising by July, coinciding with the release of their annual results. As this storied brand works through these current challenges, it would be essential for both Mulberry and its stakeholders to remain committed to its mission: to weave its rich heritage of craft into the fabric of modern luxury.
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