At the beginning of the summer, British handbag company Mulberry, shocked us all with their public announcement of the alterations they would be making to their pricing structure; an across the board slashing of their baseline prices as a response to sales figures that were in a perilous freefall. The state of the economy notwithstanding, this news still managed to take those of us who follow fashion by surprise. The luxury goods market has always enjoyed a degree of immunity from the type of downturns that plague our current economic condition, and so news that a luxury brand that has a proven track record of producing “it” bags (the Bayswater, the Alexa) not so long ago comes as a bit of a shock.
The burden for this turn of fortune for the company is reportedly being placed on the shoulders of Mulberry's ousted CEO Bruno Guillon, who sought to place the company in-line with giants of the luxury handbag industry such as Gucci and Hermes. In doing so, price points were set at a baseline that ran upwards of £1000 GBP (nearly $1500 USD), a price point that proved to be too high for your average “saving-up” customer, and essentially banished the middle market for their product, which as it turned out, happened to be their core customer base.
The new price points, although still a far cry from more affordable high street fast fashion prices, were launched in the early summer with the “Tessie” collection. This collection consists of bags that are in the £500-£800 GBP range (roughly $860-990 USD), and have proven very popular with the middle market that was so estranged from Guillon's previous efforts. But will it be enough to save the faltering company? Spokespeople for the company report that this is the first step in what will likely be a two-year effort to save the company. Only time will tell.
