Luxury giant Mulberry has dispensed with the services of chief executive officer (CEO) Thierry Andretta because of falling sales and a sharp deteriorating in its share price.
Andretta is to be replaced by Andreas Baldo, previously chief executive of Ganni, a mid-range luxury brand. He has also worked at Coccinelle and Marni Group.
Andretta had been with Mulberry since 2015, having previously worked at rival brands LVMH and Kering.
Since its establishment in 1971, Mulberry has been a staple on the British high street, including celebrity names such as Cara Delavigne, Kate Moss, Lana Del Ray and Alexa Chung among its fan base.
However, the company has been struggling over the past few months caught up within the global decline in the luxury goods sector. This is especially seen in China and other parts of Asia, as rising inflation and increased interest rates affect disposable income.
As a result, consumers in key markets such as China are being more careful about buying luxury goods, such as handbags, watches and expensive gadgets, focusing instead of essential purchases.
Mulberry's share price has fallen 39% already since January this year, trading at €1.09 at the time of writing.
Chris Roberts, chairman of Mulberry said in a statement: "Following our search process, it was clear that Andreas' international fashion brand expertise, creativity and strategic thinking meant he was absolutely the right person for this role."
Incoming CEO Baldo said in the statement: "I am thrilled to join Mulberry at such a pivotal moment and to build upon the strong sustainability credentials of this iconic luxury brand. I look forward to leading the business and its talented team into the next chapter."
Rising prices and tightening purse strings hit the high street
A number of British high street and luxury brands have felt the pinch of rising costs over the past few months, both in terms of higher rents and overheads, as well as consumers avoiding big purchases. Wetter and gloomier weather, lasting longer than expected this year, has also contributed significantly to this.
Other brands such as Marks & Spencer, Frasers and Next have also seen their share prices drop in recent days.
Danni Hewson, head of financial analysis at AJ Bell said in an email note: "Inflation might be back at "normal" levels, but the British public is still feeling the squeeze and looking for any excuse to avoid making unnecessary purchases.
"Luxury goods maker Burberry didn't escape the rout, though its share price fall coincided with news that rival Mulberry has ditched its CEO with immediate effect. It's already appointed a new man to steer the ship into less choppy waters, citing Andrea Baldo's experience with improving brand identity, sales and profitability.
“Retail, particularly in the luxury goods sector, is a cutthroat business and a bit like last season's trends- once you're out of fashion, you're just out.
"The last year has been a bruising one for all retailers, luxury or otherwise. The trick is making sure you are the first place your customer visits once they find they have a bit more cash to splash."
