Mulberry boss Guillon quits after turbulent two years

Thu Mar 20, 2014 9:45am EDT
 
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By Neil Maidment and Kate Holton

LONDON (Reuters) - Bruno Guillon has quit as chief executive of British luxury brand Mulberry, bringing an end to a two-year tenure marked by three profit warnings during an attempt to move upmarket that has failed to pay off.

Under Guillon, Mulberry hiked prices in an effort to become more exclusive and win back customers who were upgrading to pricier brands. But, like others in the market, it has been taken by surprise by the arrival of aspirational brands at the lower end of the luxury range, such as Michael Kors.

At the end of January, it was forced to cut profit forecasts for the third time in 18 months, after weak demand in South Korea and heavy discounting over Christmas in Britain which contributes 65 percent of sales.

"The board agreed that it was now time to part company," a source familiar with the situation told Reuters.

Mulberry, which makes Bayswater and Alexa handbags that sell for up to 4,500 pounds, said Frenchman Guillon would leave immediately, without saying if he would receive any payoff.

The warning wiped over 25 percent off Mulberry's shares in January, a loss from which they are yet to recover. Analysts see little short-term benefit from Mulberry's growth strategy that requires investment at a time of slowing sales.

The firm's efforts to become a global brand were also dealt a heavy blow last September when the highly-rated Emma Hill, creative director behind the Alexa and Del Rey bags, quit. Media reports suggested that Hill did not agree with the group's strategy and she is still to be replaced.

"Given all the profit warnings at Mulberry, it was debatable how long the core shareholders would keep faith with the embattled CEO and his strategy," analyst Nick Bubb said.   Continued...

 
A flag flies above fashion retailer Mulberry's store on New Bond Street in London September 27, 2009. REUTERS/Luke MacGregor