Mulberry delivered some good news and some bad news on Thursday. The bad news: The company issued yet another profit warning to investors -- the second in less than three months. It attributes the lowered estimates to the recent departure of CEO Bruno Guillon and a decline in value of two U.S. stores.
The good news: The company plans to finally address what has been one of its biggest problems over the past couple of years: pricing. Guillon was credited with hiking up the prices of Mulberry's once-bestselling handbags in pursuit of high-luxury customers. The plan backfired in a few ways: It priced out the brand's existing customers and reportedly drove out former creative director Emma Hill, who made Mulberry handbags such hot-ticket items (and made a push for pricing them affordably) in the first place.
"Following the recent change in management, we are focusing on achieving sales growth through the reinforcement of our product offering at more affordable prices to meet the expectations of our loyal customers," said interim Executive Chairman Godfrey Davis in a statement. "This will have short term financial consequences but is necessary to ensure the future strength of the Mulberry brand." It also plans to slow the rate of store openings.
The release made no mention of the brand's search for a creative director, which is coming up on a year now. Whoever Mulberry does wind up hiring will not only have the daunting task of creating handbags people will covet, he or she will also need to keep prices relatively low without sacrificing quality.