* H1 pretax profit down 36 pct to 10.0 mln pounds
* Revenue up 6 pct to 76.5 mln pounds
* Like-for-like retail sales up 11 pct in 9 weeks to Dec 1
* Year revenue and profit seen in line with expectations
* Shares up 1 pct
By Neil Maidment
LONDON, Dec 6 British luxury fashion group
Mulberry said a focus on better quality raw materials
and price increases had helped sales improve in the weeks since
its October profit warning.
Mulberry, whose shares lost a quarter of their value after
the profit alert which it blamed on lower-than-expected
wholesale revenue and disappointing international retail sales,
said on Thursday sales at stores open over a year had increased
11 percent in the nine weeks to Dec. 1.
That offset news of a 36 percent slump in first-half profit
from the handbag and leather goods maker, sending its shares up
Mulberry, which sells Bayswater handbags for 1,400 pounds
($2,300), said pretax profit for the six months to Sept. 30 fell
36 percent to 10 million pounds, as a 5 percentage points fall
in gross margin and higher operating costs offset a 6 percent
rise in revenue to 76.5 million pounds.
"The challenge today for Mulberry is to convert British
success into global success stories," said Chief Executive Bruno
Guillon, who joined the company from luxury brand Hermes in
March. "It is more an evolution than a revolution".
The firm said recent sales, buoyed by 12 percent price
hikes, were encouraging for the remainder of its year.
Mulberry shares were up 10 pence at 1,161 pence at 1156 GMT,
valuing the business at about 690 million pounds.
WH Ireland analyst John Cummins remained neutral on the
stock ahead of its key Christmas period.
"We continue to see Mulberry as a strong long term growth
story given the immaturity of the brand in many of the largest
luxury goods markets globally and revitalised strategy under the
new CEO," he said.
The firm is limiting the amount of stock heading to lower
quality wholesale accounts as part of a push to boost the value
of the Mulberry brand.
In retail it is also focusing on making products for
full-price stores over discounted outlets, while higher quality
leather is being used across the firm.
That strategy however, coincided with a slowdown in
wholesale demand and international sales, forcing the firm to
warn in October that annual profit would be below the 36 million
pounds made in 2011-12.
On Thursday it said it would meet current full-year market
forecasts - about 30 million pounds according to Reuters data.
Guillon said the revamped wholesale division would return to
growth in the first half of 2013/14 but that the changes would
result in a 10 percent decline in annual revenue this year.
Mulberry also reaffirmed its commitment to overseas
expansion in Western European tourist locations, North America,
China and Japan, targeting 15 to 20 store openings per year.
In England, where it aims to have 50 percent or more of its
leather accessories made, the group has started work on a second
factory and is reviewing additional facilities.
"We are convinced that in this quality strategy the 'Made in
England' label is crucial. If you go to China, the U.S. or Paris
people want to buy real English brands and they want to buy an
English product," Guillon said.
On Thursday, Italian fashion house Prada SpA,
popular for its coloured Miu Miu dresses and leather handbags
and shoes, said it beat forecasts with a 30 percent rise in
third-quarter net profit, shrugging off concerns about a
slowdown in demand for luxury goods.
Last month fashion rival Burberry said it was in
strong shape heading into Christmas as wealthier shoppers spend
on its top-end ranges, helping ease the pain of a slowdown in
China where demand for luxury goods had boomed.