Struggling luxury bag maker Mulberry has “neglected to connect” with British customers in recent years and plans to sell more bags in the UK, rather than China, to make the company profitable again.
Chief executive Andrea Baldo told the PA news agency the company has “lost so much business” in the UK in recent years that there is “a huge space” for the company to grow.
Founded in 1971 in Somerset, Mulberry is most famous for its luxury leather handbags.
With the right product, distribution and communication, we are able to take advantage (of the UK market) no matter where the economic conditions are
But it has seen profits nosedive of late, partly as a result of waning appetite for luxury goods among Chinese consumers, previously a key market for the fashion company.
Mr Baldo said the company will focus less on China and close 12 stores across its Asian estate while aiming to open more shops in UK cities in future.
It will also re-enter the wholesale and outlet sales markets, including by striking new deals to sell its items at John Lewis and Flannels.
Mulberry has no presence in Birmingham or Liverpool, he said, and it will look to expand in those cities in future.
The UK expansion comes after retailers such as Marks & Spencer have warned that rising company taxes and falling consumer sentiment could hit their home market.
While Mr Baldo admitted those factors are “a challenge”, he added: “With the right product, distribution and communication, we are able to take advantage (of the UK market) no matter where the economic conditions are.”
Mr Baldo, who joined last year from luxury brand Ganni, wants the company to focus on its “Britishness” and “cultural relevance” and simplify the business to counter plunging profits.
He laid out plans to cut costs by a quarter compared with the last financial year, following a period of “suboptimal” performance.
Mr Baldo also said Mulberry will look to expand in the US.
We need to get back to where we came from and return to the spirit of Mulberry
The company made nearly one-fifth less in revenue over the key Christmas period than the previous year, blaming a “challenging” business environment.
That was even worse in Asia, where sales slumped by 28% compared with the festive period in 2023.
In Europe and the US, by contrast, sales grew 11% year-on-year.
Mr Baldo said: “We need to get back to where we came from and return to the spirit of Mulberry.”
He added that for the company to succeed “the business model needs to be simplified”.
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.
Meanwhile, Mulberry has also hired a new finance head, Billie O’Connor, a former Marks & Spencer and Selfridges executive.
Mr Baldo said: “Billie has a wealth of experience working in the consumer retail space and has spent time leading finance teams through turnarounds.”
