Mulberry Group Plc said Bruno Guillon will step down as chief executive officer after two years during which the British luxury handbag maker lost two-thirds of its market value.
Guillon, who joined Mulberry from Hermes International SCA in March 2012, will leave immediately, Somerset, England-based Mulberry said today in a statement. Former CEO Godfrey Davis, the company’s non-executive chairman, will become executive chairman until a successor is found, Mulberry said.
Guillon’s plan to raise prices and expand Mulberry globally failed to resonate with consumers. The CEO cut forecasts twice in his first year at the helm and Mulberry said in January that profit would be substantially below estimates because of weak sales in the U.K. and order cancellations in South Korea.
“He was trying to do an Hermes and upscale the brand,” said Rahul Sharma, managing director of Neev Capital in London. “Some brands have the DNA to do that and some don’t. That’s where he struggled.”
Mulberry creative director Emma Hill, who was credited with driving the company’s growth with bags such as the Alexa, quit last year after disagreeing with the CEO’s decision to move the brand more upscale, a person familiar with the matter said at the time. The maker of 2,000-pound ($3,309) ostrich leather bags has yet to announce a replacement.
The shares rose 8 pence to 644.5 pence at 9:17 a.m. in London. They have slumped 66 percent since Guillon joined.
During his two years at Mulberry, Guillon helped improve the quality of the company’s offering and international presence, Davis said in the statement.
“I am confident that Mulberry has the heritage, brand appeal and products to build on what has been achieved,” he said.
Davis started with the company as finance director in 1987, becoming chairman and CEO in November 2002.
Guillon earned 807,000 pounds in the year ended March 31, 2013, according to Mulberry’s last annual report.
Executive directors are employed under a contract that can be terminated with one year’s notice, the report shows.