Luxury brand Mulberry is to launch more affordable handbags in a bid to win back customers priced out of the market.
The British firm will scrap its strategy of hiking prices after the focus on more costlier designs resulted in its second profit alert in three months yesterday.
The decision to reverse the pricing plans overseen by ousted chief executive Bruno Guillon is likely to have a short-term impact on earnings, it warned.
The new strategy was unveiled by Godfrey Davis, who oversaw the rapid growth of the brand between 2002 and 2012 and has returned to the helm on an interim basis while a permanent boss is found.
Under Guillon’s leadership, the company tried to make itself more exclusive by improving the quality of its products and increasing appeal in key overseas markets.
However, the resulting hike in prices alienated the firm’s core customer base and triggered a series of profit warnings. The group’s Bayswater and Alexa handbags sell for up to £4,500 each.
Analysts at Barclays cut their forecast for 2015 profit before tax by 42 per cent to £11 million.