West-based luxury brand Mulberry, best known for its £1,000-plus handbags, has promised to launch new products with slightly cheaper price tags after revealing that profits nearly halved in its last financial year.
Chairman Godfrey Davis, who is leading a restructuring of the business to restore growth, said it had listened to its customers and was now “introducing attractive new products in the key £500-800 price range”.
It will also open fewer new outlets this year and concentrate on maximising sales in its existing stores. However, the opening a new flagship store in Paris will go ahead. 
Pre-tax profits fell from £26m to £14m which Mulberry, based in Chilcompton, blamed partly on the £4.8m it spent on new store openings this year and last year. Total sales were down from slightly from £165.1m to £163.5m.
Retail sales rose by 2% to £109m but on a like-for-like basis fell 3%.were down 6% to £54.5m.
Mulberry opened its second UK factory in Bridgwater a year ago, creating 320 jobs. The move doubled its UK production capacity and more than half its handbags are now made in the UK using traditional skills and craftsmanship.
During the year Mulberry started to operate a new supply chain management system to allow it to forecast demand and allocate production more effectively as well as improve inventory management. It also opened two partner stores in Europe and Asia and closed two in Korea and the Middle East.
Mr Davis said: “Our new handbag offering introduced over the last two seasons has focused on bags priced above £1,000, but has lacked new and interesting products in the key price range of £500 to £800. The design team will ensure that they deliver attractive new product within this key price range while continuing to refresh the collections across our full price spectrum. The benefit of this will be progressive.”
Mulberry's shares rose on yesterday's announcement by more than 4% to close at 737.5p.
