Any immediate turnaround in fortunes for the U.K. luxury brand Mulberry has failed to materialize, with the company announcing weak sales for the first ten weeks of its trading year on Thursday. Analysts have told CNBC that Mulberry's woes are reminiscent of the wider luxury goods market which has seen a split in recent years.
Back in April, Mulberry buoyed investors with plans to release a more "affordable" range of products to add to its luxury handbags. The Tessie collection - retailing at around £600 - was seen as a chance for the company to capture the middle ground that it had previously deserted, helping traders to shrug off a profit warning issued along with the announcement.
The new range which was launched two weeks ago is "proving popular," according to Thursday's press release which accompanied the full-year results, but the Somerset company hasn't managed to derail a trend of falling sales. Like-for like sales for the ten weeks to June 7 were 15 percent below those for the same period last year, it said. Investors responded by dumping Mulberry shares on Thursday morning - with the stock falling 4 percent at the open.
"The outlook for the current financial year remains challenging. Although there are encouraging signs in our own full price retail business, including the well-received launch of the new Tessie collection, we expect the improvement in sales will be progressive," the company said.