Mulberry Group Plc said a sales rebound gained momentum in the last 10 weeks as the U.K. luxury-goods maker won customers by re-introducing more affordable prices.
Retail sales rose 17 percent in the period ended June 6, the Somerset, England-based company said Thursday. That marked an improvement on the 9 percent gain in the second half of last year, itself a rebound from the first-half’s 9 percent drop.
Sales are recovering after Mulberry reversed former Chief Executive Officer Bruno Guillon’s strategy to move the brand upmarket. Guillon left last year and was replaced in April by Thierry Andretta, who has worked at Lanvin, Moschino and LVMH Moet Hennessy Louis Vuitton SE. Celine accessories designer Johnny Coca will join as creative director next month.
Mulberry has “just generally done a better job on the product,” Chairman Godfrey Davis said by phone on Thursday, citing the new Cara, Tessie and Alice bags. “We’ve introduced things that people like the look of.”
Mulberry’s pricing “seems to be hitting a sweet spot and that has also added impetus to our sales,” Davis said of the decision to add more bags costing between 500 pounds ($773) and 1,000 pounds.
Digital initiatives such as allowing people to order online and collect from stores are also boosting business, Davis said. The surge in purchasing goods via smartphones means Mulberry won’t need as many stores as might have historically been the case, according the chairman.
The shares rose 15 pence, or 1.7 percent, to 920 pence at 10:18 a.m. in London. They’ve gained 12 percent this year, after falling 44 percent during three straight years of decline.
Mulberry has made some small adjustments to prices “because the euro has moved so quickly,” though it’s not very material in terms of margin, Davis said. “We’re holding them down in euros, while the market catches up with what’s happening in currency terms.”
Also Thursday, Mulberry reported a 74 percent slump in full-year pretax profit to 4.5 million pounds, before one-time items. Analysts at Barclays in April predicted earnings of 4.3 million pounds on that basis.
The dividend is unchanged at 5 pence a share, which the company said reflects its confidence in the medium-term outlook.