After a string of profit warnings hit the beleaguered luxury company, Mulberry chairman Godfrey Davis, is nevertheless optimistic over the latest figures released in spite of the overall decline. The figures show a slight improvement in retail sales over the last ten weeks (up 17%), which could be a telltale sign of the success of the company’s new pricing strategy. After the disastrous stint of former chief executive Bruno Guillon, who had upped retail prices in a bid to turn the fun, lifestyle brand into a ‘British Hermès’, Mulberry decided to go back to its roots and embrace its affordable luxury attitude once again.
Last year, nearly 60% of the bag offering was retailing for over the £1,000 mark, but with a new strategy in place, Mulberry intends to buck the trend. This year has seen nearly 70% of their leather goods now priced between £500 and £1,000 in order to appeal to its lost customer base, and without altering the quality of the bags.
“We are becoming a more democratic business”, said Davis, “and now sell smaller handbags at £300, such as the Mini Lily, which still might be a lot of money to some people but can be seen as an affordable luxury.”
Smaller, and extremely popular bags, and the use of less leather as part of new designs —rather than poorer quality leather— has been some of the solutions presented by Mulberry to save its margins. However, the calamitous consequences of Mulberry’s stretch into higher-end luxury has meant an 87% dip in its profit readings before tax, falling from £14 million in 2014 to £1.9 million this year.
Hopes are high for Mulberry’s management with the forthcoming arrival of creative director Johnny Coca, formerly known as the it-bag producing designer for French house Céline. After a two-year gap without any creative director since the departure of wonder designer Emma Hill, Mulberry is without a doubt pinning all of its hopes on this new appointment. Coca should start his role on July 8th and is said to bring about lots of bright colours and fun designs along with lower price points in order to pump new life into the hard-pressed house.