Mulberry performed a strategic U-turn yesterday, pledging to cut the prices of its high-end handbags as it issued its fourth profit warning in two years.
The company had been attempting to move more upmarket under chief executive Bruno Guillon, who quit last month after overseeing his third profits warning. Godfrey Davis, Mulberry's former chief executive, who stepped in as executive chairman, yesterday scrapped planned price rises and announced that five bag ranges would be brought into shops in June at an "entry price level" of £500 to £695.
"We have always sold expensive products and these have been doing well, but there was a gap at the more affordable end for the domestic consumer," Mr Davis said.
Mulberry warned that pre-tax profits for 2014 would now be about £14m, against expectations of about £19m. Its shares, which have fallen by more than a fifth since January, were down 1.1 per cent at 701.5p yesterday.
Mr Davis confirmed that its two Somerset factories will still manufacture about 50 per cent of its products, with the rest made in continental Europe. Mr Davis now has to find a new chief executive and a creative director after its star designer, Emma Hill, left last year.