British premium handbag manufacturer, Mulberry, has been slated by a leading business academic over its poor pricing and marketing strategies.
The brand has announced a 46% fall in profits and Professor Qing Wang of Warwick Business School, an expert in researching luxury brands, says it has no one to blame but its management.
Wang said: “Despite the runaway success of recent years, Mulberry suffers from a number of weaknesses. The company's sales growth is too concentrated on the UK, Europe and US. For example, in 2011, sales at its New York and Paris stores grew by 122% and 151% respectively.
“Despite almost half the Mulberry stores being in Asia, only a handful are in China, compared to more than 100 Burberry stores in China. Burberry’s sales growth is particularly strong in the Asia-Pacific region, where its goods are sold in 10 times more outlets than Mulberry.
“There is little doubt that Mulberry is currently in a transitional period as it attempts to transform itself from a humble British heritage to a global luxury brand.
“However, the huge price increase last year for its high end products to match its aspired new exclusive luxury status appeared not to have been thought through, as the price increase was not backed up by strong narratives but was purely based on cost considerations."
Wang said the blame for the poor sales performance lies squarely with senior management who remain guilty of 'knee-jerk' reactions.
He added: “It seems to me that the management of Mulberry failed to understand that even with the right ingredients that Mulberry possesses such as fine material, craftsmanship and a ‘made in Britain’ label, the making of a true luxury good requires time and process to distil.
“The latest knee-jerk reaction to reduce the price due to a profit warning will only add to the confusion in the mind of the consumers of the company's brand image as to whether it's an affordable luxury like Coach or an exclusive luxury like Burberry.”