Mulberry wants to cut prices of its bags to less than 1,100 pounds to boost sales

Mulberry Group aims to sell most of its luxury handbags for less than 1,095 pounds (1,309 euros) to broaden the appeal of the struggling brand and boost sales, according to the new chief executive.

The British company's flagship product, the Bayswater bag, is sold at this price, and Andrea Baldo is trying to reduce the cost of its other products so that 60% of the range is sold at a price lower than the Bayswater.

“We were asking a little too much of the customer,” he said in a phone call with Bloomberg News. “In reality, we are becoming a kind of value for the market in the luxury space.”

Andrea Baldo, who took over as CEO of the British brand in September, is trying to turn around the company by targeting customers looking for more affordable luxury goods amid falling demand at other fashion houses. On Tuesday, the company announced that its pre-tax loss widened to GBP 15.7 million (€19.7 million) for the 26 weeks ending September 28. The Asia-Pacific region recorded the biggest decline in retail sales with a decline of 31%, due to a slowdown in China, a key market for high-end products. Overall, its sales fell by 19% in the first half of its financial year to 56.1 million pounds.

Mulberry's difficulties prompted it to announce plans to cut around 85 positions at headquarters, including in its commercial, product and finance divisions.

Last month, the company rejected a takeover offer by billionaire Mike Ashley of Frasers Group Plc, which owns a 37% stake, according to data compiled by Bloomberg. At the time, Frasers criticized Mulberry's board for failing to provide a clear business plan, while only engaging with Challice, its majority shareholder, on financing options.

The value of Mulberry shares has fallen by a third this year. Andrea Baldo previously served as CEO of Danish clothing brand Ganni, which appealed to young shoppers in the 2010s. During his more than five years at the helm of Ganni, he oversaw a major international expansion of the brand.

Fashionnetwork.com with Bloomberg