Change in strategy could see Mulberry appeal to the contrarian investor

As Mulberry reports full year results Helal Miah, investment research analyst at The Share Centre, explains what they mean for investors.
 
“This morning, Mulberry reported struggling sales as international growth was impacted by a slowdown in Asia, leaving the company still heavily reliant on the UK and Europe. Profitability was hit by the cost of store openings and investment in the new factory.
 
“The company’s strategy to take the brand more upmarket has failed, however investors will be pleased to see the new management acknowledge this. Mulberry will be introducing a more affordable range of products and focus on improving the productivity of existing stores.
 
“This change in strategy may finally begin to see a turnaround in Mulberry’s fortunes. Investment into the supply chain to build a more scalable business and the new factory in place, which has expanded UK production capacity by 50%, should fit better with a lower price, higher volume business. We continue to recommend Mulberry as a ‘hold’ for now, however the more adventurous contrarian investors may want to dip their toes.”