Tourists abandon Mulberry

Lower sales drag down profits

Mulberry currently believes sales for the financial
year 2013, which ends in March, will be limited to 165 million pound (193
million euro), mainly due to the decline in wholesale activities by
15%. Financial analysts had expected sales of 175 million pound (205 million
euro). Last financial year the accounts closed with a record of 168
million pound (197 million euro).

Profitability is also affected by this turnover decrease: the
company is counting on a gross profit of 26 million pound (30 million euro) for
the financial year 2013, well below the expectations of 30.7 million pound (36
million euro) and about a third below the 36 million pound (42 million euro)
earned last year.

Chinese customers

To turn the tide, CEO Bruno Guillon wants to
put more effort into tactical international marketing. He believes Chinese tourists coming to
London and Paris should already know the brand and its brands of luxury bags like
Baywater and Alexa before they leave for Europe. Guillon also wants to open up twenty new locations, all
overseas.

The profit warnings follow three years of
strong growth. Guillon, who joined the company from Hermès last year, believes
this is a year of consolidation, which will be the foundation of future growth.