Analysts have said Mulberry’s move upmarket has happened too quickly and is one of the factors causing it to issue a profit warning this week.
The British brand was forced to downgrade its profit guidance after retail revenues slipped 3% in the 17 weeks to January 25. It blamed the competitive UK market and substantial discounting across the sector during the festive trading period.
But one retail source said chief executive Bruno Guillon’s attempt to move the brand more upmarket was a significant factor. Mulberry has hiked up prices by around 12% since the end of 2012.
Deborah Aitken, senior analyst at Bloomberg Industries, agreed. “Mulberry’s move to the higher-end offering may have been too soon in some markets where the brand is lesser known and certainly less penetrated,” she said.
Independent analyst Nick Bubb added: “It looks as if Mulberry went too upmarket too quickly and that some of its success was just a short-term fad.”