LONDON (Reuters) - British handbag maker Mulberry (L:MUL) slumped to a first half loss as it counted the cost of an ill-fated push upmarket but said a return to its lower priced roots had seen sales rise more recently.
The firm, whose aspirations for a more exclusive luxury position led to three profit warnings this year, posted a loss of 1.1 million pounds for the half to Sept. 30, compared to a pretax profit of 7.2 million pounds a year ago.
Sales fell 17 percent in the half with margins also down as it pushed more 500-800 pound bags in a bid to win back customers put off by the higher priced products championed by ousted boss Bruno Guillon.
Mulberry veteran Godfrey Davis, who took over from Guillon in March, said on Thursday the take-up had been good with total retail sales up 8 percent in the nine weeks to Nov. 29 and 2 percent on a like for like basis, boosted by online growth following new services such as click and collect.
"After a difficult couple of years, the steps that we have taken to return Mulberry to growth are beginning to bear fruit," said Davis, who has also had to grapple with tough industry conditions such as lower tourist numbers and weaker demand in key markets like China.
Last month the firm named Celine's Johnny Coca as its creative director, replacing Emma Hill, who was behind its successful Alexa and Del Ray bags and quit over a year ago.
Shares in Mulberry, which makes over 60 percent of its sales in Britain, closed at 780 pence on Wednesday, down 21 percent on a year ago, valuing the business at 466 million pounds.
(Reporting by Neil Maidment; editing by James Davey and Kate Holton)