UK's Mulberry Group shifts focus away from China, targets UK, US
Business
UK's Mulberry Group shifts focus away from China, targets UK, US
(Reuters) - The Mulberry Group said on Thursday it plans to focus on its identity as a British luxury brand by realigning operations in Asia, reducing its exposure in China and focusing on the UK and US markets instead.
Like other luxury goods companies, Mulberry has been hit by consumers' fading appetite for high-end goods in China. Its plan to return to profitability comes just months after larger rival Burberry said it would focus on its British heritage appeal to win back customers.
"We need to get back to where we came from and return to the spirit of Mulberry," said CEO Andrea Baldo, who took office in September. "It is also clear to me that for Mulberry to succeed, the business model needs to be simplified."
Luxury brands have been struggling globally with a shrinking customer base amid price hikes and economic uncertainty, and prolonged economic weakness in China has been a further drag on retailers' margins.
Mulberry also said it was working to reduce operating costs by about 25% on an annualised basis compared to 2024 after reporting a 27.9% drop in Asia Pacific sales in the 13 weeks through Dec. 28. Revenue fell 18.3% during this period, but Europe and U.S. sales grew by 11.1%.
Mulberry, which is famous for its luxury leather handbags, also named Billie O'Connor as its new finance boss.
Loss-making Burberry in November had said it was taking steps to streamline its operations and improve margins.
