Mulberry bags sales rise as it slashes premium prices
BRITISH handbags maker Mulberry today showed signs it is swinging back to recovery after learning the mistakes of an ill-fated upmarket push that saw its pre-tax profit and sales tumble.
Chairman Godfrey Davis said there was no shock that turnover dropped 9% to £148.7 million in the year to 31 March.
The group has been battling declining sales and was forced to issue a string of profit warnings after former boss Bruno Guillon’s attempt to take the brand upmarket sent product prices soaring and alienated its core UK customers.
However, since November last year, its new expanded cheaper ranges helped sales bounce back and the appointment of fashion veteran Thierry Andretta to revive its fortunes as chief executive has been welcomed.
Davis said: “We are regaining our core UK customers. We looked at what was working and what was not. What we have done [since] has got us in the right place.”
Popular products in the second half of the year included its Alice bag range which are in the £800 to £1000 bracket, and the Cara Delevingne collection.
Andretta, who has held senior roles at the luxury heavyweights Gucci Group and LVMH, told the Evening Standard he faced “a difficult but interesting challenge” at Mulberry.
Plans for this year include expanding its online offering further in Europe and into the US. In July former Céline accessories design director Johnny Coca, joins as creative director.
The overhaul paid off in the 10 weeks to 6 June, with sales up 17%.
Andretta said: “We are committed to strengthening our position in the UK whilst continuing to pursue our international growth strategy.
“We are focused upon translating the luxury values and Britishness of the Mulberry brand to a global audience.” The group, fronted by Delevingne and Georgia May Jagger, saw its pre-tax profit drop to £4.5 million from £17.4 million the previous year.
This was slightly ahead of forecasts of £4 million.
On the update, Barclays raised its full-year 2016 Ebit forecast by 28% from £4 million to £5.1 million. The shares were flat at 905p.