Mulberry Sales Recover After Luxury Blunder

Mulberry has confirmed its ill-fated decision to go upmarket pushed it to a half-year loss but a return to its lower-priced roots is now "bearing fruit".

The British firm, best known for its handbags, had issued three profit warnings in the run-up to its latest results.

It posted a loss of £1.1m for the six months to 30 September compared to a profit of £7.2m the previous half-year.

Sales in the period fell 17%, as it had previously announced, but Mulberry said on Thursday that new ranges of lower-priced bags had helped total retail sales rise 8% in the nine weeks to 29 November.

Like-for-like sales were 2% higher.

Its aspirations for a more exclusive luxury position proved disastrous and culminated in the departure of chief executive Bruno Guillon in March after customers shunned the soaring prices of its goods.

Mulberry veteran Godfrey Davis, who took over from Guillon but as executive chairman, said its new offering had been boosted by strong online growth.

He said: "After a difficult couple of years, the steps that we have taken to return Mulberry to growth are beginning to bear fruit and looking further forward, we expect to gain further momentum from the appointment of Johnny Coca as our new creative director."

He replaced Emma Hill, who quit a year ago, last month at a time when the luxury industry remains embroiled in a fierce battle for custom.

Mulberry, like rivals Louis Vuitton and Gucci, has been struggling to compete against brands giving consumers the look and feel of luxury at a fraction of the price.

To better compete, the Somerset-based company has strengthened its product offering at a price range of £500-£800.

Its range of Cara Delevingne-branded bags has been tipped to be a big part of its sales recovery.

Its share price, which has lost a fifth of its value over the past 12 months, rose 2% in early trading on Thursday.