REG - Mulberry Group PLC - Strategy Update, CFO Appointment & Trading Update

MulberryAnnouncement

30/01/2025 07:00

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RNS Number : 2005V  Mulberry Group PLC  30 January 2025

Mulberry Group plc

("Mulberry" or the "Company" or the "Group")

 

Strategy Update

 

Appointment of Chief Financial Officer

 

Trading Update

 

Following the conclusion of Chief Executive Officer Andrea Baldo's strategic
review, the Board of Mulberry, the British luxury brand, is pleased to
announce the details of its new strategy: "Back to the Mulberry Spirit" - a
plan to restore Mulberry to profitability through simplification, brand
realignment and enhanced customer connection.

 

Mulberry is also pleased to announce the appointment of Billie O'Connor as
Chief Financial Officer and an update on trading for the 13 weeks ended 28
December 2024.

 

STRATEGY UPDATE - "Back to the Mulberry Spirit"

 

The Board believes that Mulberry is a beloved British brand, operating in a
resilient category of leather goods and employing quality craftsmanship to
manufacture and sell its products at a unique price point. The Company is also
a sustainability champion having become a B Corp in 2024. The Board believes
that these strengths set the Company apart in its markets.

 

The Board recognises that the Company's recent performance has been
sub-optimal and envisages a two phased strategy to address this:

·     in the near-term, the Company's focus will be on rebuilding gross
margin and restoring profitability; and

·     over the mid-term, the Company is targeting annual revenue of
£200m+ and 15% adjusted EBIT margins to enhance shareholder value.

 

In order to achieve these goals, the Board, in conjunction with the CEO, has
set the following three strategic priorities:

 

1.   Simplification: Simplifying the Company for disciplined execution

·     Refocus on the UK market, accelerate growth in the US and re-align
operations in Asia with a reduced emphasis on China.

·     Execute a channel-agnostic cluster strategy in all markets and
re-enter wholesale and outlets.

·     Active and continuous cost control management across the Company
to drive efficiencies while protecting craft and culture.

·     Implement a focused product offering, reduce promotional
dependency and maintain the unique price range, setting Mulberry apart from
the market.

 

2.   Brand refresh: Realigning Mulberry's identity as a British lifestyle
brand and reinvigorating its cultural relevance

·     Reposition the Company to celebrate British lifestyle, whilst
appealing to global, fashion forward audiences.

·     Improved approach to creativity and design: a new creative team to
drive cultural relevance and seasonal innovations.

 

3.   Customer connection: Leveraging insights to deepen connections and
drive demand

·      Enhance customer insights using data platforms and CRM tools.

·      Improve customer personalisation and in-store experiences.

·      Strengthen direct-to-consumer operations with a refined product
launch structure.

 

Since the appointment of Andrea Baldo as CEO in September 2024 and as
previously announced, Mulberry has already taken decisive steps to strengthen
its balance sheet and streamline its operations to become a leaner, more agile
organisation.

 

Additional strategic actions underway include:

·     New commercial partnerships: including with Flannels and John
Lewis.

·     International developments: building on the Nordstrom partnership
with an additional 5 new sites agreed, new commercial partnerships with David
Jones and the closure of 12 loss making stores in APAC.

·     Reduced cost base: forensic spending review with a reduction in
operating costs of about 25% on an annualised basis vs FY24.

·     Product and brand development: re-focused product offer, and
expansion on core icon families including Islington, Amberley and Bayswater.

·     Restructure of the leadership team, to bring creativity and
operational excellence back to the heart of the brand.

 

Further details of the "Back to the Mulberry Spirit" strategy can be found on
the Company's Investor Relations website:
https://www.mulberry.com/gb/investor-relations

 

APPOINTMENT OF CHIEF FINANCIAL OFFICER

 

The Board today announces the appointment of Billie O'Connor to the Board as
Chief Financial Officer with effect from 17 February 2025. Billie qualified in
2007 and has spent her career working in the consumer and retail sectors, most
recently as the CFO and CIO of Milk & More, a subsidiary of the Muller
Group, which she joined to drive a turnaround and eventual sale. Prior to
this, Billie held a variety of finance roles at Selfridges Group, Marks and
Spencer, Walgreens Boots Alliance and Esporta Group.

 

As announced on 20 January 2025, Charles Anderson will provide support to the
Company until 1 August 2025 to assist with an efficient handover of
responsibilities.

 

TRADING UPDATE - 13 weeks ended 28 December 2024 (the "period")

 

Trading over this important festive period was satisfactory. In line with the
Board's expectations, Group revenue for the period declined 18.3% (-17.1% on
constant exchange rates "CER") versus the same period in the prior year, as a
result of the continuing challenging macro-economic environment. Retail sales
declined 16.5% (-15.2% CER), with trade in the UK down 20.3% also impacted by
a lack of exposure to outlet and wholesale channels. International retail
sales declined 8.7% (-4.6% CER), with trade in Asia Pacific down 27.9% (-23.6%
CER), offset by growth of 11.1% (14.9% CER) in the rest of world due to
positive momentum in Europe and the United States. The Company continued to
take actions to manage costs and inventories during the period to ensure they
aligned with revenues. As expected, trading for the full financial year ending
March 2025 will be weighted towards the second half.

 

ANDREA BALDO, CHIEF EXECUTIVE OFFICER COMMENTED:

 

"Our new strategy sets out our commitment to turnaround this business and
return to sustainable profitability.

 

"We need to get back to where we came from and return to the spirit of
Mulberry. First created by Roger Saul over 50 years ago, it is this
Britishness, cultural relevance, creativity and responsible craftsmanship that
is so loved by our customers. These strengths, along with our unique price
position, sets us apart from the market.

 

"It is also clear to me that for Mulberry to succeed, the business model needs
to be simplified - including re-prioritising the UK and taking a channel
agnostic approach - while also ensuring we lead with creativity to reignite
brand desirability and deepen connections with our customers.  We are already
acting at pace and putting our strategy in action, including through new
wholesale agreements with Flannels and John Lewis.

 

"I would also like to welcome Billie O'Connor to Mulberry as our new Chief
Financial Officer.  Billie has a wealth of experience working in the consumer
retail space and has spent time leading finance teams through turnarounds.  I
am looking forward to working with her and while there is much to do, I am
confident that with this new strategy and team we will drive long-term
shareholder value and achieve our vision to become the most loved British
lifestyle brand."

 

BILLIE O'CONNOR, INCOMING CHIEF FINANCIAL OFFICER COMMENTED:

 

"I am delighted to be joining the business as it embarks on this next chapter.
Mulberry is a key part of Britain's luxury retail landscape and a brand I have
always admired. The new strategy Andrea has outlined today is a clear
turnaround plan with ambition for the future.  I am looking forward to
working with the talented team and craftspeople to execute this new strategy
and drive sustainable financial growth."

 

 

ADDITIONAL INFORMATION ON BILLIE O'CONNOR

 

Billie Joan O'Connor (CIMA), aged 43, is currently or has previously been a
director of the following companies within the past five years:

 

 Current Directorships        Past Directorships (5 years)
 NOVA Community Limited       Moreco Property Group Ltd
 The Old Forge Streatley Ltd  Moreco Group Ltd
 The Twenty Club              Decisions Financials Ltd
                              GG Wildlife Experiences Ltd

 

Save as disclosed above, there is no further information required to be
disclosed pursuant to Schedule 2, paragraph (g) of the AIM Rules.

 

 

FOR FURTHER DETAILS PLEASE CONTACT:

 

 Mulberry
 Charles Anderson and Kate Anthony Wilkinson                companysecretary@mulberry.com

 Headland (Public Relations)
 Lucy Legh / Joanna Clark                                   Tel: +44 (0) 20 3805 4822
                                                            mulberry@headlandconsultancy.com 
 Houlihan Lokey UK Limited (Financial Adviser and NOMAD)
 Tim Richardson                                             Tel: +44 (0) 20 7839 3355

     
 Peel Hunt LLP (Corporate Broker)
 James Thomlinson                                            Tel: +44 (0) 20 7418 8900

 

 

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