The boss of luxury retail company Mulberry says he needs to “rebuild the business”, after sales dropped by almost a fifth in the past six months.
The Somerset-based designer company told shareholders group revenues fell by 19% to £56.1m in the six months prior to 28 September.
It added sales were challenging in the face of a “difficult trading environment and uncertain macroeconomic trends”.
Newly appointed CEO, Andrea Baldo, says he has a “refreshed business strategy” and has cut 85 roles as part of the shake-up.
The cuts, which impact about a quarter of its 350-strong workforce, have predominantly impacted its London design headquarters, as well as some Somerset office workers.
Mulberry is among several firms to have been hit hard by a sharp decline in luxury spending worldwide.
Revenues from its wholesale and franchise business dropped by 46% to £5.4 million, as it was particularly affected by partners in Italy and Denmark reducing their orders due to tough conditions.
Meanwhile, UK revenues fell by 14% to £31.3 million amid “low consumer confidence”.
The company also saw pre-tax losses widen to £15.7 million for the period, compared with a £12.8 million loss a year earlier.
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.
Mr Baldo said: “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.”
