Mulberry Axes Upmarket Strategy As Sales Drop
The extent of the damage caused by Mulberry's ill-fated move to go upmarket and raise its prices has been laid bare, with annual profits nearly halved and sales continuing to fall.
The brand - best known for its leather handbags - had issued a string of profit warnings in the run up to the release of its results.
The demise in sales culminated in the architect of its strategy - chief executive Bruno Guillon - stepping down in March.
The company, which is now being run on a temporary basis by its chairman Godrey Davis, has sought to introduce new products in lower price brackets after many items all but doubled in cost under Mr Guillon's tenure.
Mulberry confirmed on Thursday that pre-tax profits fell 45% to £14m in its financial year to the end of March, while like-for-like sales in the 10 weeks to June 7 declined 15%.
Two years of upheaval have had a big effect on its share price - losing more than a quarter of its value in the past year alone following a meteoric tenfold rise.
The loss of creative director Emma Hill last summer was among the reasons for the decline in value while a sharp drop in Christmas sales wiped £400m from its market cap.
The brand, associated with its signature postman's lock inspired by the catch on a English postman's satchel, confirmed earlier this week that fashion veteran Thierry Andretta, former boss of Lanvin and now head of Italian jeweller Buccellati, had joined its board.
The group is currently working to extend its product range at lower price points, towards £500 to £800, to win back customers put off by the earlier price rises designed to bolster Mulberry's image as a luxury brand alongside the likes of Louis Vuitton.
Mulberry told Sky News it did not plan to cut the cost of goods which existed prior to the change of price strategy.
Mulberry - like its established rivals - also faces threats from the growing popularity of online-focused fashion brands, which are more able to adapt to new trends and sell at a fraction of luxury prices.