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Mulberry Profits Drop Nearly 50%: Will Less Expensive Handbags Help?

The British luxury goods maker continues its search for a new CEO and creative director.

Mulberry, which has neither a CEO nor a creative director at present, had, unsurprisingly, a less than stellar financial year.

For the fiscal year ending March 31, the British luxury house saw profits drop nearly 50 percent to £14 ($23 million). The company said the fall was due to costs associated with new store openings and other one-off costs. The numbers were pretty much in line with analysts' expectations.

Wholesale revenue went down 6 percent, while international revenue was up 11 percent as the company opened nine new international stores. Online sales were down 11 percent.

This continues to be a time of transition for Mulberry. The past 12 months saw the departure of Creative Director Emma Hill and of CEO Bruno Guillon, the latter of whom was ousted after his strategy to introduce more expensive products failed to resonate with customers. Neither has been officially replaced. In the meantime, Executive Chairman and interim CEO Godfrey Davis has begun to fix Mulberry's pricing problem, introducing two weeks ago a set of bags priced between £500 to £800 (about $850 - $1,350 USD), which the company thinks will prove beneficial as it continues to roll out more product within this range.

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So far, 500 of these bags have been sold, which is promising as the collection, dubbed Tessie, has primarily only been available in Europe and online -- it's starting to hit the U.S. and Asia now. The company expects to start seeing a noticeable improvement in the second half of this year.

But will it see a new CEO or creative director? "It's an important role and the board is aware that people are frustrated that it is taking time, but we are determined to find the right person," Davis tells Vogue UK. He adds, "Our choice of CEO will be informed by our choice of creative director, which is what the board is focused on primarily."