Mulberry Issues Yet Another Profit Warning, Plans Lower Priced Product

mulberrySomerset, 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.

 

 

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Jeff Prine, Editor at Large, Accessories Magazine
Jeff returns as a regular contributor to Accessories magazine. Initially Jeff worked as senior editor at Accessories more than 20 years ago and his love of the industry has followed him until present. Since his tenure here, Jeff has continued to report jewelry, watch and other luxury goods trends as executive editor at Modern Jeweler magazine, fashion director at Lustre, and as contributor on products and trends for consumer and trade publications and websites. In addition to his editorial experience, Jeff also served as an adjunct instructor for accessories merchandising at Fashion Institute of Technology. jeffp@busjour.com

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