Mulberry has announced a dramatic U-turn, promising to cut the prices of its high-end handbags as the luxury leather brand issued its fourth profit warning in two years.
The firm had been attempting to move more upmarket under chief executive Bruno Guillon, but he quit last month after overseeing three profit warnings since joining in 2012.
Former chief executive Godfrey Davis stepped in as executive chairman, and - following criticism the brand has alienated its core customer at home in favour of wealthy overseas shoppers - he today promised to “reinvigorate sales by the introduction of more affordable new product”.
This will include the scrapping of a planned price rise in November and bringing in five bag ranges into shops in June at an “entry price level” of between £500-£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,” Davis said.
Mulberry - which in February unveiled a new collection from supermodel Cara Delevingne - warned pre-tax profits for 2014 would now be around £14 million; analysts were expecting roughly £19 million. Shares, which dived more than 25% after January’s profit warning, edged up 2.5p to 712p.
Barclays downgraded their profit estimate of £19 million to £11 million for 2015 and margins have been hit. But Davis confirmed its two Somerset factories will continue to make around 50% of its products with the rest made in Europe. He also has reduced the number of stores to open to five, from eight.
The brand is under pressure to turn things around after its star designer Emma Hill left last year and it cancelled its show at London Fashion Week
Davis is now tasked with finding a new chief executive and creative director and said he is “very focused” on finding the right candidates.