Board takes pay cut at Mulberry

Directors in Mulberry, the luxury goods group, are to take a 12 per cent pay cut following the group's poor performance which has seen it slump into increased losses. The company has also imposed a pay freeze on the rest of its staff in an attempt to reduce costs. It has already reduced its payroll by 10 per cent since last year.

The boardroom pay cut includes that of chief executive Roger Saul, whose salary was pounds 120,000 last year, and Godfrey Davis, the finance director, who earned pounds 150,000. Mr Davis said: "We work as a team and we felt we should set an example."

He refused to comment on whether the pay cut should be in line with the fall in the company's share price since its flotation in 1996. The shares have lost more than half their value since their 153p placing on the Alternative Investment Market.

Yesterday the shares closed down a further 5.5p to 64.5p when the company announced increased half-year losses of pounds 720,000. It blamed the strong pound for hitting sales in London and Europe. It is also exposed to the financial turmoil in the Far East.

Another luxury goods retailer also lost its aura yesterday when Theo Fennell, the up-market jeweller, issued a profits warning. It blamed disappointing Christmas trading with sales to high net-worth customers lower than anticipated. The strong pound and the Far East were other factors, it said. The shares slumped by 7p to 25.5p.

- Nigel Cope

Investment column, page 20