Mulberry Signals Worst May Be Behind It as Profit Drop Eases

SOMERSET, United Kingdom — Mulberry Group Plc said careful cost control meant annual earnings were better than estimated, as a new management team tries to restore the fortunes of the struggling U.K. handbag maker.

Pretax profit before exceptional items was “slightly ahead” of expectations, the Somerset, England-based company said Thursday in a statement. Analysts at Barclays lifted their estimate for annual adjusted pretax profit from 4 million pounds to 4.3 million pounds on Thursday.

Mulberry, which last month appointed a new chief executive officer, also said full-year sales fell to 148 million pounds from 163 million pounds, in line with expectations. The introduction of the spring-summer collection in November lifted sales in Mulberry’s own stores, helping soften a decline in the wholesale business, the company said.

“The encouraging retail trends over the last five months reflect our reinvigorated product offer and focus upon our customers,” Chairman Godfrey Davis said in the statement.

Mulberry named Thierry Andretta as CEO last month. He replaced Bruno Guillon, a former Hermes International SCA executive who quit last year after a plan to move the brand upmarket backfired, causing earnings to tumble. The retailer warned on profit in October.

Celine accessories designer Johnny Coca will join Mulberry as creative director in July.

Mulberry reports full-year results on June 11.

By Andrew Roberts. Editors: Matthew Boyle, James Boxell.