Mulberry Finally Finds a Chief Executive Officer

One year. Twelve months. That's what the U.K. company has taken to find a replacement for Bruno Guillon.

Leeson. 18/03/2015
Delphie Mulberry
«Delphie Sky Blue & Midnight» by Mulberry. Click to buy

It is very obvious for the luxury industry that Mulberry has serious problems. It is almost inconceivable that such a company lasts a year to find a substitute for the CEO, the most important position of the company with the creative director. To make matters worse, the substitute had been in the house since last year. Thierry Andretta, which is the name of the new CEO, was appointed independent director of Mulberry in June 2014.

The U.K. company has tracked the market for a candidate, a fruitless search so far (we do not know if it has been the lack of interest of potential candidates because of the category of the challenge or because the company was firm focused on finding a new creative director (Johnny Coca was named as such in November).

In any case, it has preferred someone from inside, that besides his knowledge of Mulberry can demonstrate a broad curriculum in the luxury industry. Among other companies he has worked for Moschino, LVMH and Buccellati, where he was also CEO.

From now on, the new team must define its own strategy to boost sales. What we can rule out is what was made by the previous CEO (and that cost him the job): try to raise the profile of the company to the top luxury segment. Buyers do not seem willing to pay more for its products, an effort that has resulted in recent years a real romp in the results of Mulberry, even posting losses in the last fiscal quarter.

Garden Wellie
Garden Wellie, Multi Wild Floral Jacquard, S/S 2015

Currently its shares are traded at 860 pence on the London Stock Exchange, far from the 2,500 it reached in 2012. In addition, the market consensus gives a target price of just 740 pence, well below its current market value. However, there are reasons for optimism: their shares are up 30% from its lows in October, just before the appointment of the new creative director. And since late last year, positive reviews from analysts have dominated on the negative.

Mini Bluebell Dress
Mini Bluebell Dress, Black Trellis Jacquard, Mulberry S/S 2015

All recommendations I know are to maintain (not sell), suggesting that experts are waiting for the good that can come in the future.

Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it. The author has no business relationship with any company whose stock is mentioned in this article.

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