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| Mulberry chief executive steps down in wake of profits warning | Mulberry chief executive steps down in wake of profits warning |
| (about 3 hours later) | |
| The Mulberry chief executive, Bruno Guillon, has fallen on his sword (or perhaps his handbag) and abruptly left the company after a disastrous move to raise prices and take the luxury handbag brand more upmarket alienated its core British clientele. | |
| His departure comes less than two months after the British label, whose soft leather bags have been seen dangling off the arms of Victoria Beckham and the Duchess of Cambridge, issued a profits warning – the third in the space of 18 months. | |
| In a brief statement, Mulberry said Guillon had stepped down with immediate effect after a turbulent two years at the helm during which the company lost two-thirds of its market value. He is understood to be getting a payoff. | |
| Godfrey Davis, the chairman and Guillon's predecessor who masterminded Mulberry's rapid growth between 2002 and 2012, will run the company as executive chairman until a successor is found. | Godfrey Davis, the chairman and Guillon's predecessor who masterminded Mulberry's rapid growth between 2002 and 2012, will run the company as executive chairman until a successor is found. |
| His focus is on finding a new CEO as well as a new creative director, following the shock departure of the highly regarded Emma Hill last summer after six years. She was credited with transforming Mulberry from a traditional British briefcase and wallet maker into an international fashion label favoured by celebrities. Mulberry is also indebted to Kate Moss who first stepped out with one of its Bayswater bags a decade ago. | |
| Its best-known product is the Alexa satchel, named after the model and TV presenter Alexa Chung. It made a splash when it debuted in 2009, priced at £750, and sold out within three weeks. The price has since risen to £1,100, with a more expensive version selling for £4,500. | |
| Under the tenure of Davis – who once said that it was a "grave mistake for luxury brands to think all their customers are super-rich" – Mulberry bags could be had for £500. | |
| Since joining the company in 2012 from Hermès, Guillon has raised prices in an attempt to turn the "affordable luxury" label into a full-scale designer brand. That strategy backfired and Mulberry's shares nearly halved from £13 over the last year. On Thursday morning, they rose 5% to £6.69. Over Christmas Mulberry was forced to slash its prices. | |
| Guillon was defiant in an interview with the Sunday Times last year, insisting that a short period of pain was necessary to reposition the Mulberry brand. He told the paper: "Fast growth is very nice to have but also dangerous. You can't do something with strong foundations from one day to another." | Guillon was defiant in an interview with the Sunday Times last year, insisting that a short period of pain was necessary to reposition the Mulberry brand. He told the paper: "Fast growth is very nice to have but also dangerous. You can't do something with strong foundations from one day to another." |
| Mulberry has just begun a collaboration with model-of-the-moment Cara Delevingne as it battles to restore its fortunes. She unveiled a collection of Mulberry bags during London fashion week a month ago, including one inspired by her lion tattoo. | Mulberry has just begun a collaboration with model-of-the-moment Cara Delevingne as it battles to restore its fortunes. She unveiled a collection of Mulberry bags during London fashion week a month ago, including one inspired by her lion tattoo. |
| Rahul Sharma, the managing director of Neev Capital in London, told Bloomberg that Guillon "was trying to do an Hermès and upscale the brand. Some brands have the DNA to do that and some don't. That's where he struggled." | |
| Davis said: "I, along with the board, would like to thank Bruno for his hard work over the past two years. | Davis said: "I, along with the board, would like to thank Bruno for his hard work over the past two years. |
| "He has helped improve the quality of the Mulberry offering and enabled the company to increase its international appeal and grown international retail sales. I am confident that Mulberry has the heritage, brand appeal and products to build on what has been achieved." | "He has helped improve the quality of the Mulberry offering and enabled the company to increase its international appeal and grown international retail sales. I am confident that Mulberry has the heritage, brand appeal and products to build on what has been achieved." |
| Davis rescued the brand before, taking the helm in 2002 after years of losses as part of a boardroom coup instigated by Mulberry's biggest shareholder, the Singaporean billionaire Christina Ong. Mulberry's founder, Roger Saul, was ousted at the time. | |
| Mulberry generates more than 60% of its sales in Britain but is betting on overseas expansion to countries including China and the US. | |
| In stark contrast to Mulberry, Guillon's previous employer, Hermès – known for its Kelly and Birkin leather handbags which cost €7,000-€30,000 (£5,800-£25,000) – lifted its dividend on Thursday after posting a 9% rise in 2013 profits to €1.2bn, although it admitted that profits will be dented by the weak yen this year. |