LONDON — Mulberry Group is poised to enter a new chapter as it hunts for a chief executive officer as well as a creative director, and observers insist it should turn back time and revive former strategies.
This story first appeared in the March 21, 2014 issue of WWD. Subscribe Today.
On Thursday, the company said that Bruno Guillon was stepping down as ceo with immediate effect after two tumultuous years.
Guillon’s tenure was marred by multiple profit warnings — the most recent of which was in January — the resignation of creative director Emma Hill, and the collapse of the company’s share price.
Mulberry shares, which are listed on the London Stock Exchange, have slumped by about 65 percent on an adjusted basis since Guillon arrived at the company. On Thursday, they closed up 5.5 percent to 6.72 pounds, or $11.16, following the news of his departure.
Mulberry is majority owned by Challice Ltd., a company controlled by Ong Beng Seng and Christina Ong. They own 56.2 percent, while the rest is listed on the AIM division of the LSE.
Godfrey Davis, currently the group’s non-executive chairman and previously its ceo, will become executive chairman until a successor for Guillon is found.
Guillon, formerly managing director of Hermès France, took up his role in March 2012, and during his tenure sought to take Mulberry upmarket with higher prices and to build it into an international name that could compete with the big luxury brands.
For nearly a year he was attempting to execute those strategies without a creative director. The brand has not yet named Hill’s successor, and last month canceled its fall catwalk show. Instead, during London Fashion Week, it hosted a presentation and party to launch a new bag designed by Cara Delevingne.
The company declined further comment about its future on Thursday, but industry sources said Mulberry needs to unravel Guillon’s work.
An industry source close to Mulberry said the company should try to convince Hill and Georgia Fendley, Mulberry’s former brand director, to return. “Get Emma and Georgia back, watch the brand rediscover its identity and let the stock price recover,” said the source, who asked not to be identified.
Hill’s last collection was for spring 2014, and she has been pursuing personal projects since leaving Mulberry last year. She spent six years at the brand, and sources said she left because of disagreements with management over creative and operational strategy. Fendley also left last year to focus on her branding and creative agency, Construct London.
Luca Solca, managing director of global luxury goods at Exane BNP Paribas, told WWD: “The problem at Mulberry has been an ill-conceived and badly executed attempt to drive the brand to a higher price point. The truth is that Mulberry was very successful in the accessible and aspirational price segment, but could never make it in the high end, as it was not credible from a content and heritage point of view. What Mulberry has learned from the experience is that it is not enough to hire a ceo from Hermès to change its brand DNA.”
Solca added that Mulberry should “go back to its roots and price where it is credible and desirable to consumers. Megabrands moving upmarket are creating a significant price umbrella and a very interesting opportunity for the likes of Mulberry to exploit; think Michael Kors, Kate Spade, Tory Burch and Longchamp. This is very much where Mulberry should play.”
In January, Mulberry said that sales for the year ending March 31 will likely be flat against last year’s 165 million pounds, or $273.6 million. It pinned the blame on lower-than-expected U.K. retail sales — a result of tough pre-Christmas trading conditions — and wholesale order cancellations from South Korea, which accounts for 20 percent of its wholesale business.