Somerset, England—Giving its fourth profit warning in two years (the second in 2014) Mulberry Group Plc. said today its profit for the year ended March 31 will be “marginally below” estimates.
The warnings came following the abrupt department last month of CEO Bruno Guillon.
‘Reinvigorate Sales with More Affordable Product’
Profit before tax for the year ended March 31 is expected to be around 14 million pounds (about $23.6 million) compared to 26 million pounds last year, Mulberry said.
But the profit warning may have been mitigated by the fact Mulberry also plans to turnaround some of Guillon’s policies, namely his push to shift the leathergoods brand into higher priced, more exclusive product.
Interim Executive Chairman Godfrey Davis said he plans to reinvigorate sales by introducing more affordable new product.
“”The primary objective is to reinvigorate sales by the introduction of more affordable new product,” Mulberry said in a trading update. “As a consequence of these factors, in particular the pricing strategy, there will be a material adverse impact on profit whilst brand momentum rebuilds.” The company also plans to slow store openings, adding five this year, compared with eight in the previous 12 months.
Mulberry’s share price dropped by two-thirds under Guillon’s tenure as the company lost sales to high street revivals and affordable luxury imports such as Michael Kors.