Pressure mounts on Mulberry boss as company prepares to announce sharp fall in profits
Group prepares to announce a 46 per cent fall in annual profits
Monday 09 June 2014
Pressure on Mulberry's chairman, Godfrey Davis, is mounting this week as the group prepares to announce a 46 per cent fall in annual profits.
The luxury brand - which has a new Cara Delevingne collection - is set to announce annual profits of £14m on Thursday, after having issued two profit warnings already this year.
The group is still searching for a chief executive and creative director, with Mr Davis having stepped in as interim chief executive when Bruno Guillon left the group in March following three profit warnings. Mr Davis, its former chief executive, and the finance director, Roger Mather, have now presided over four profit warnings and investors are growing impatient for news of a fresh team.
Mr Guillon who was at the group for two years and joined from Hermes was blamed for the departure of creative director Emma Hill who left last June after allegedly disagreeing about the direction of the brand.
But Mulberry has retained some fans and it received good reviews from the fashion press on Friday when it revealed its pre-spring/summer 2015 collection. It also achieved a good reaction to the launch of a cheaper line of bags.
David Madden at spreadbetter IG said: "Mulberry's share price has taken a battering in the past few months. The share price has been has been stuck in the 680-730p range. Expectations to the downside have already been managed so I doubt the stock will drop below 640p. If the figures are good the share could target 855p." He estimated an operating profit of £17m and revenue of £163m on Thursday.
Mulberry closed on Friday at 749p. More than 50 per cent of Mulberry is controlled by Singapore's Ong Beng Seng and Christina Ong.
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