Mulberry pledged to meet demand for lower-priced products today after a disastrous year in which profits were cut by nearly half to £14 million.
The Somerset-based luxury goods firm will sell more products in the £500 to £800 price range, having alienated its loyal fans during the last two seasons by selling more bags priced over £1,000.
The recently launched Tessie collection is proving popular but with the rebalancing of the product range expected to take time Mulberry said that like-for-like sales in the 10 weeks to June 7 were down by 15%.
Profits in the year to March 31 slumped from £26 million a year earlier due to costs associated with opening new stores and other one-off items. Total sales were slightly lower at £163.5 million.
The new strategy has been unveiled by Godfrey Davis, who oversaw the rapid growth of the Mulberry brand between 2002 and 2012 and has returned to the helm on an interim basis while a permanent boss is found.
Under the leadership of previous boss Bruno Guillon, the company sought to compete with the likes of Prada by improving the quality of its products and increasing appeal in international markets.
However, the resulting increase in prices alienated the company's core customer base and triggered a series of profit warnings.
Creative director Emma Hill also resigned from the luxury handbag maker last year amid speculation over disagreements with Mr Guillon, who was formerly managing director of Hermes France.
Mr Davis said: "We are taking steps to restore the business to growth by creating desirable new product across the entire Mulberry range whilst continuing to invest for the longer term.
"We have listened to our customers and are introducing attractive new products in the key £500-800 price range. As a first step we introduced the new Tessie collection two weeks ago which is proving popular."