Fashion Brief
British handbag maker Mulberry said its switch to more affordable prices had sent sales up strongly at the start of its new financial year after its ill-fated move upmarket resulted in a 74% collapse in full-year profit.
Mulberry has spent the past year sprucing up its ranges and reconnecting with its lower priced roots after a move to a more exclusive luxury position backfired, prompting a string of profit warnings and the exit of chief executive Bruno Guillon.
A tighter grip on costs and a strategy U-turn which helped revive sales since November has boosted Mulberry’s shares, but the damage of its ill-fated push upmarket was laid bare in its adjusted pretax profit for the year to 31 March, which fell 74% to £4.5m. That was slightly ahead of forecasts of £4m.
Retail revenue, helped by a strengthened range of more affordable but lower margin £500-£1,000 priced bags, grew 1% but was more than wiped out by a 29% fall in wholesale sales.
The group said its new expanded cheaper ranges had helped total retail sales rise 17% for the 10 weeks to 6 June, up 15% on a like-for-like basis.
“I am pleased that the strategy we approved as a board last year is beginning to bear fruit,” said new CEO Thierry Andretta, who joined in April. The new creative director, Johnny Coca, was recruited from Céline last year.
