Mulberry brings in cheaper handbags
KATE HOLTON
NEIL MAIDMENT
LONDON : Britain’s Mulberry Group Plc could take up to years to return to profit growth after deciding to scrap an unpopular push into higher-priced handbags and return to more affordable luxury, its acting head said on Thursday.
Mulberry’s push to swap its “affordable luxury” tag for a more exclusive position was led by Bruno Guillon,ousted as chief executive in March after the strategy was undone by its core shoppers turning to cheaper affordable luxury rivals such as Michael Kors.
After a review, the firm said it would now sell more bags at cheaper as it warned investors on 2013-14 profit for the second time in three months, penciling in a pre-tax profit of £14 million ($ 24 million), some26% below market forecasts and almost half what it made the year before
“There’s a change in emphasis, I’m not dramatically changing things but I’m looking at the needs of what I thing is an important customer for us,” interim executive chairman Godfrey Davis, a 27-years Mulberry veteran, told Reuters.
Guillon’s pursuit of more exclusive aspiration followed that of lager rivals like Kering and LVMH Moet Hennessy Louis Vuitton SA, who have also been surprised by newcomers grabbing customers at the lower end of the market.
Brands such as Michael Kors and Tory Burch, whose bags are priced at a fraction of their more illustrious rivals, are proving increasingly popular, especially with emerging-market customers — the industry’s main growth engine.
Mulberry brings in cheaper handbags
KATE HOLTON
NEIL MAIDMENT
LONDON : Britain’s Mulberry Group Plc could take up to years to return to profit growth after deciding to scrap an unpopular push into higher-priced handbags and return to more affordable luxury, its acting head said on Thursday.
Mulberry’s push to swap its “affordable luxury” tag for a more exclusive position was led by Bruno Guillon,ousted as chief executive in March after the strategy was undone by its core shoppers turning to cheaper affordable luxury rivals such as Michael Kors.
After a review, the firm said it would now sell more bags at cheaper as it warned investors on 2013-14 profit for the second time in three months, penciling in a pre-tax profit of £14 million ($ 24 million), some26% below market forecasts and almost half what it made the year before
“There’s a change in emphasis, I’m not dramatically changing things but I’m looking at the needs of what I thing is an important customer for us,” interim executive chairman Godfrey Davis, a 27-years Mulberry veteran, told Reuters.
Guillon’s pursuit of more exclusive aspiration followed that of lager rivals like Kering and LVMH Moet Hennessy Louis Vuitton SA, who have also been surprised by newcomers grabbing customers at the lower end of the market.
Brands such as Michael Kors and Tory Burch, whose bags are priced at a fraction of their more illustrious rivals, are proving increasingly popular, especially with emerging-market customers — the industry’s main growth engine.
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