Mulberry boardroom shake-up cost £1m

The recent boardroom battle at Mulberry, which cost the founder of the luxury goods retailer his job as chairman and chief executive, cost the company nearly £1m, extending its financial woes.

The company was guarded about the payoff awarded to Roger Saul, who was forced to take a figurehead position as president, insisting it formed "only a small part" of the total £900,000 it spent on the management shake-up. Mr Saul, who set up the company with £500 on his 21st birthday, also became a non-executive director.

Godfrey Davis, the former deputy chairman and chief operating officer who took over from Mr Saul, warned the total bill would "have a damaging effect on the year as a whole". He said the group would review the decision to combine the role of chairman and chief executive, admitting it was "not terribly fashionable".

His comments came as Mulberry, best known for its stylish luggage and leather bags, reported a widening half-year loss of £1.05m. Turnover rose 10 per cent to £13.3m but gross margins plunged by 10 percentage points to 44.1 per cent reflecting increased sales of discounted goods.

Mr Davis described the decision to oust Mr Saul from his executive functions as "more of a relationship thing" than related to the group's slipping sales. Christina Ong, the billionaire Singaporean fashion designer whose Challice Group holds a 41.5 per cent stake in Mulberry, spearheaded the move to have Mr Saul removed, sparking accusations that it was a precursor to a full takeover. Mulberry opened a new shop in the Netherlands yesterday.