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Mulberry raises profit expectations after turning point in handbag sales

Mulberry, the luxury handbag maker, has said profits will be better than previously expected after a bounce back in sales.

The Somerset-based company’s sales rose 9% in the six months to 28 March, compared to a fall of 9% in the previous half-year, after it returned to its tradition of more affordable bags. Underlying sales, stripping out the effect of new store openings, rose 7% partly thanks to a 26% surge in turnover online.

“The encouraging retail trends over the last five months reflect our reinvigorated product offer and focus on our customers,” said chairman Godfrey Davis, who took the reins of the group a year ago. “I believe there is evidence of a turning point in our business.”

He said tight control of day-to-day costs would mean profits would be better than expected, after a profits warning in October. Strong retail sales have also offset a slump in wholesale orders which have fallen by about 30%. Davis said wholesale orders have now stopped declining.

Davis will now hand over to Thierry Andretta, the new chief executive, after he returned to an executive role in March last year. He stepped in after the abrupt exit of former chief executive Bruno Guillon whose attempt to take the brand into the super-luxury sphere led to a slump in profits.

Davis introduced the cheaper Tessie collection of bags and a lower-priced version of the brand’s popular Bayswater bag.

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