Mulberry Price Reduction

Hello Everyone,

I haven't got much to update you on in regards to my next step after finishing university, but I thought I would include something that I recently read and thought you might like. It is no secret that I love the good things in life, but in order to be able to afford the good things you have to work hard and save for them. Something I enjoy collecting is designer handbags, a totally cliche girly things of me to say but I have to admit i have a pretty hefty obsession with them and quite a lovely collection.

I currently have four Mulberry handbags in my collection and I recently read that they are planning to meet the demand and lower their prices on handbags after much request but also due to the high sales fall last year. I think we all know that Mulberry can be a little on the pricey side and I for one am thrilled they are lowering their prices and feel so many other designers or more luxurious brands should think of doing the same.

The upmarket brand, whose bags could set you back around £5000 (depending on the style) announced results for their financial year and their pre-tax profits were predicted to fall to around £14 million from their £26 million profit the year earlier. That is just under a 50% loss! In January Mulberry revealed that their Christmas trading was poor and their profit warnings prompted the departure of their chief executive Bruno Guillon. Bruno Guillon increased all prices in an attempt to take Mulberry further upmarket.

Godfrey Davis, the interim executive chairman who ran Mulberry for 10 years until 2012, announced a range of Mulberry handbags priced at £495. According to Godfrey Davis, the move was needed to keep hold of customers in the UK, where Mulberry makes more than 60% of its sales. Davis has reassured loyal customers that Mulberry will not skimp on the quality of materials. "That's why our margin will be squeezed, we don't compromise on quality."

I think the new price reductions and the new marketing campaigns with renowned model Cara Delevingne will really spark up some interest and hopefully make up for the loss they have been experiencing. From a business perspective this is something we would look at in my Strategy and Change Management lectures and seminars. I read this as a type of case study and it really got my business skills flowing!

I hope you enjoyed this post! Make sure to check back next week for another instalment!

Speak soon!