Mulberry on recovery path after ill-fated plan to go upmarket

Better retail demand and a tight control on costs has meant Mulberry will produce profits above market expectations.
Better retail demand and a tight control on costs has meant Mulberry will produce profits above market expectations.
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HANDBAG MAKER Mulberry, aiming to recover from an ill-fated push upmarket, said improving retail demand and a tight grip on costs meant full-year profit would be slightly ahead of market expectations.

The company has spent the past year sprucing its ranges and reconnecting with its lower priced roots after a move to a more exclusive luxury position backfired, prompting a string of profit warnings and the exit of chief executive Bruno Guillon.

Mulberry said yesterday its spring/summer collection, which included a strengthened £500-£800 bag range, had delivered a much improved sales performance since November, with retail revenue for the year expected to be up 1 per cent.

The rise would be more than offset by a sharp decline in wholesale revenue however, meaning group revenue for the year to March 31 would fall 10 per cent to £148m, in line with forecasts.

Mulberry said cost controls would still put profit before exceptional items slightly ahead of market forecasts.

According to Reuters data, analysts are on average expecting a pre-tax profit of £4.7m, down 66 per cent on 2013/14.

Last month the firm named Thierry Andretta as its new CEO to work alongside Johnny Coca, another alumnus of fashion brand Céline who is due to become creative director on July 8.

Andretta had previously held a number of senior roles at groups including Lanvin, Moschino, the Gucci Group, LVMH Fashion as well as Céline.

He was until recently the chief executive of Buccellati, the Italian luxury jewellery brand.