Mulberry targets lower-priced handbags as profits fall

Model Cara Delevingne poses with a Mulberry handbag Cara Delevingne modelled her Mulberry range at London Fashion Week in February

Related Stories

Luxury handbag firm Mulberry says it will introduce lower-priced products after an attempt to move further upmarket hit sales and profits.

Mulberry has pledged to win back customers with a £500 to £800 handbag range after trying to break into the top end of the luxury goods market.

Profits for the year to 31 March fell to £14m from £26m the previous year.

The company also said that like-for-like sales in the 10 weeks to 7 June were down by 15%.

Rebalancing act

Under former chief executive Bruno Guillon, Mulberry raised its prices in an effort to become more exclusive and win back customers who were upgrading to more expensive brands.

However, in the last two seasons Mulberry lost customers by offering more bags priced at £1,000 and above.

Mr Guillon left the firm in March this year.

"We are taking steps to restore the business to growth by creating desirable new product across the entire Mulberry range whilst continuing to invest for the longer term," said executive chairman Godfrey Davis.

In the past few weeks, Mulberry has introduced its new Tessie handbag collection, which starts at £495, and it said the range was "proving popular".

Mulberry said retail sales grew by 2% overall to £109m, but this driven by new store openings. Like-for-like sales - which strip out the impact of new stores - were down 3%.

Wholesale sales were down 6% to £54.5m, with a double digit decline in wholesale sales expected this year.

"These results, which will come as no surprise, show that Mulberry continues to suffer the consequences of its misguided strategy to align itself with the ultra-luxury likes of Prada and Fendi," said retail research firm Conlumino.

More on This Story

Related Stories

The BBC is not responsible for the content of external Internet sites

More Business stories

RSS

BBC Business Live

  1.  
    VIRGIN AUSTRALIA 06:49:
    Virgin planes

    Virgin Australia overnight announced losses of A$355.6m (£200.5m) for the year - more than three times its loss last time. It blamed "weak consumer sentiment" and too many planes - like its rival Qantas which reported its results yesterday.

     
  2.  
    CO-OP VOTE 06:35: BBC Radio 4

    Big changes to the structure of the deeply troubled Co-op group will be put to a ballot of members tomorrow. Phil Dorrell, of consultants Retail Remedy, tells Today that even if the changes go through, a new leadership will have lot of work to do. "This will be a large step-change. My one concern would be that it probably shouldn't be the final change for the Co-op, they should consolidate, make sure they get their businesses back on track, and then have another look at it in a couple of years time."

     
  3.  
    EUROZONE ECONOMY 06:22: Radio 5 live

    Wake Up to Money ponders whither the eurozone? This week France had to re-appoint its cabinet because of its failing economy. Italy re-entered recession earlier this month and even German GDP was down slightly in the latest quarter. Kathleen Brooks, from Forex.com tells the programme: "Some economies are falling at a faster rate than others but what we've really seen is the core economies Germany and France lagging behind Spain."

     
  4.  
    HOUSE PRICES 06:14:
    For Sale signs

    The gap between house sellers' asking prices and actual selling prices is widening, says the property website Hometrack. It explains that the market is cooling down, at least in terms of prices. It says sellers in England and Wales typically got 96% of their asking price in August, falling back for the third month in a row. But it adds house prices only tend to start falling when the percentage of the asking price that sellers achieve falls below 94%.

     
  5.  
    GOOGLE DRONE 06:03:
    Google drone

    Overnight, Google said it was developing drones to act as flying delivery vehicles. The company calls it Project Wing. But it said it would take many years to create a service with lots of drones making lots of deliveries every day. More here.

     
  6.  
    06:00: Rebecca Marston Business reporter, BBC News

    All of that. Stay with us - we're here 'til 13:00.

     
  7.  
    06:00: Ian Pollock Business reporter, BBC News

    Good morning, we are here again, to keep you informed, educated and possibly entertained.

     

Features

  • A painting of the White House on fire by Tom FreemanFinders keepers

    The odd objects looted by the British from Washington in 1814


  • Chris and Regina Catrambone with their daughter Maria LuisaSOS

    The millionaires who rescue people at sea


  • Plane7 days quiz

    What unusual offence got a Frenchman thrown off a plane?


  • Children testing a bridge at a model-making summer school in Crawley, West SussexSeeding science Watch

    The retired professor who turned village children into engineers


BBC © 2014 The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.