Updated 2 p.m. ET June 20
LONDON — Mulberry’s owners are looking to supercharge the brand’s turnaround with a further capital raise of 20 million pounds, earmarked for rebuilding core stocks and fortifying sales channels such as outlets, wholesale and e-commerce.
On Friday, Mulberry also updated the markets on its fiscal 2025 performance. Revenue is set to fall 21 percent to 120 million pounds, with pre-tax losses widening slightly to 23 million pounds. The company said the numbers are still under audit and it expects to publish the full results next month.
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Investors remained wary and sent shares of the company down 6.7 percent to 105 pence in London on Friday, leaving the firm with a market capitalization of 73.6 million pounds.
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Trading in the first 11 weeks of the new fiscal year, which began in April, has been “in line” with the board’s expectations. The company said it is not expecting to see much revenue growth in the current year.
As part of its wider turnaround plan, Mulberry also announced 5.9 million pounds in annualized gross cost savings. Mulberry has been looking to reduce its cost base, optimize the store estate and enhance operational efficiencies.
Last November, the company set plans to slash 25 percent of head office staff, around 85 roles, as part of the same efficiency drive.
Andrea Baldo, chief executive officer, said the company is “firmly in turnaround mode, focused on rebuilding profitability and gross margin, while strategically investing in brand-building initiatives.”
Baldo’s medium-term goal is to achieve revenues of 200 million pounds and an earnings before interest and tax, or EBIT, margin of 15 percent.
Mulberry has been expanding its door numbers with existing partners such as Nordstrom in the U.S. and David Jones in Australia and, on Friday, Baldo pointed to new U.K. distribution deals with Flannels and John Lewis.
The company is also focusing on its core handbag families such as the Bayswater, Alexa and Amberley, and exiting some of its non-profitable stores.
“We’ve refreshed the executive team, aligned talent to our revised strategy, and launched a new brand campaign to drive customer engagement. Operationally, we’ve enhanced customer service through a new incentive model linked to in-store conversion, improved relationships with our supply chain partners and built a robust wholesale pipeline for” 2026, Baldo added.
The CEO first announced his rejuvenation strategy in January. Called “Back to the Mulberry Spirit,” it aims to achieve profitability “through simplification, brand realignment and enhanced customer connection.”
Baldo’s aim is to turn Mulberry back into the “culturally relevant British lifestyle brand,” it once was, when Luella Bartley was creating “It” styles for the brand, and Stuart Vevers, and later Emma Hill, were at the creative helm.
Henrietta Gallina, director of the creative studio at Mulberry, said so much has transpired over the last few years “and we’ve had to engage in some profound introspection as we shape the future of Mulberry. What started out as necessary exercise, turned into a deep interrogation and excavation to recover our spirit.”
The latest 20-million-pound fundraise was triggered by a year-end review of the company’s performance and the difficult macro-economic environment in which Mulberry — and its fashion peers — are trading.
According to sources close to Mulberry, management wants to “keep up the momentum” and act “at pace” to turn the company around.
As reported last fall, Mulberry raised an initial 10.4 million pounds, which was underwritten by majority owners Christina Ong and Ong Beng Seng. The money was meant to reinforce the group’s balance sheet and provide financial flexibility to support management’s turnaround plan.
Challice has confirmed that it would be willing to underwrite the latest fundraising, in full, if required. Mulberry said the structure of the deal is still being determined, and the board is engaging both with Challice and the brand’s substantial minority shareholder Frasers Group.