British luxury fashion group Mulberry defended its plans to move further upmarket, saying it was crucial to expansion plans in Asia, where local shoppers and outbound tourists are still spending heavily on top-end lines.
Mulberry, known for its Bayswater and Alexa handbags, makes over 80 percent of its sales in Britain and continental Europe, and has been hit hard recently by weak consumer spending there, as well as cooling demand from Chinese shoppers and tourists.
After issuing two profit warnings since October, the firm posted an expected 28 percent drop in annual profit on Thursday.
Chief Executive Bruno Guillon has responded in part by taking the group a little more upmarket from its traditional position of "affordable luxury." Mulberry hiked prices by 12 percent in November and has launched more handbags priced over 1,000 pounds ($1,600), which it says have gone down well in Asia and the United States.
Mulberry, which opened 17 stores in the year ended March, plans to open 15-20 in its new financial year, pinpointing prime locations and flagship stores in Asia and North America, where it has 42 and 6 stores respectively out of a total of 118.
The group is also using higher quality materials and limiting volumes of best sellers to maintain exclusivity. The group posted pretax profit of 26 million pounds for the year ended March on a 2 percent fall in revenue to 165 million. Retail revenue for the 10 weeks to June 8 was up 9 percent, with like-for-like sales up 6 percent.
source: yahoonews