British brand to announce results after poor Christmas trading prompts rethink of move to take label further upmarket
The upmarket brand, whose bags cost up to £5,000, announces results for the year to 31 March on Thursday. Pre-tax profit is predicted to fall to about £14m from £26m a year earlier.
Mulberry revealed in late January that Christmas trading was poor. The profit warning was its third in 18 months and prompted the departure in March of Bruno Guillon as chief executive.
Guillon increased prices in an attempt to take Mulberry further upmarket, abandoning customers prepared to pay £500 but not much more for a brand sported by Kate Moss and Victoria Beckham.
Godfrey Davis, the interim executive chairman who ran Mulberry for 10 years until 2012, announced a range starting at £495 in April. Mulberry launched the Tessie bags at the end of last month.
Davis said Mulberry had got it wrong by targeting rich Chinese and Middle Eastern shoppers while pricing out British customers.
He warned of "short-term consequences" from the cheaper range, including squeezed margins. But he said the move was needed to keep hold of customers in the UK, where Mulberry makes more than 60% of its sales.
guardian.co.uk © Guardian News and Media Limited 2010