Somerset, England—After cutting Mulberry’s forecast thrice in two years and its stock down some 66%, Mulberry Group Plc today announced that CEO Bruno Guillon will step down.
Guillon, who joined Mulberry from Hermès in March 2012, will leave immediately and former CEO Godfrey Davis, the company’s non-executive chairman, will become executive chairman until a successor is found, Mulberry said.
Hermès Strategy Didn’t Work?
During his tenure, Guillon has embarked on a strategy to expand Mulberry internationally along with pushing Mulberry into more upscale pricepoints. International sales have been up by 40%, but overall sales have been hurt as Mulberry lost market share to affordable luxury brands.
For the 17 weeks ending Jan. 25, Mulberry reported total retail sales were down 3% but its holiday revenue, the eight weeks to Jan. 25, was even worse, total retail sales fell by 7%.
Hence the company issued a warning that for its fiscal year ending March 31 its profit would be “substantially below” market expectations, sending its share value down by 22%. Weak sales in the UK and order cancellations in South Korea were cited as behind the warnings.
Guillon’s strategies also reportedly caused creative director Emma Hill to leave. Hill, who was responsible for boosting Mulberry’s sales with “It” bags like the Alexa, left last year after disagreeing with Guillon over taking a more upscale direction.
David, however, credited Guillon with improving the company’s quality and expanding its international presence.
“I am confident that Mulberry has the heritage, brand appeal and products to build on what has been achieved,” Davis said.
“He was trying to do an Hermès and upscale the brand,” said Rahul Sharma, managing director of Neev Capital in London. “Some brands have the DNA to do that and some don’t. That’s where he struggled.”