Mulberry says overhaul will take time as sales drop further

* Says to see full benefits of strategic U-turn only next year

* Like-for-like sales in 10 weeks to June 7 down 15 pct

* Annual pre-tax profit down 46 pct at 14 mln pounds (Adds analyst, management quotes, details, share price)

By Astrid Wendlandt

PARIS, June 12 (Reuters) - English luxury handbag maker Mulberry said on Thursday it would take time to return to growth and hire a new creative and management team after an ill-fated attempt to move upmarket took its toll on sales and profits.

The brand, hit by a string of profit warnings, said the full benefits of its strategic U-turn would start to be felt only next year when its first lower-priced autumn/winter collection hits the stores in May.

Mulberry declined to provide a sales growth forecast for the current year, with Executive Chairman Godfrey Davis only admitting that "this is a reasonably tough year for us."

Davis, however, said he expected trading to improve in the second half of the year thanks to new product launches.

Mulberry whose retail same-store sales fell 3 percent in the year ended March 31, witnessed a further drop of 15 percent in the 10 weeks to June 7, a performance it said was worsened by comparing it with last year's boost from clearance sales.

The brand's retail sales, from directly operated shops, represent about 70 percent of total revenue.

Mulberry also posted a near halving of pre-tax profit in the year to March, falling to 14 million pounds ($24 million) from 26 million the previous year, in line with its warning in April.

"Mulberry enters the new (fiscal) year in a state of transition," Barclays (LSE: BARC.L - news) said in a note.

Mulberry is working on strengthening its product offering at a price range of 500 to 800 pounds ($800-1,300) to win back UK customers put off by its previous focus on handbags priced at over 1,000 pounds.

Mulberry, like rivals Louis Vuitton and Gucci

Davis explained that Mulberry, known for its classic brown leather bags with locks inspired by a postman's satchel, was going back to its roots of providing people with "everyday, practical and beautiful things."

The priority for the group is to hire a new creative director following Emma Hill's departure last September, he said, adding that he hoped this would be done before the end of the year.

"Once we have settled the creative director appointment we will look for a new chief executive, though of course we have started doing some initial research," Davis said.

Finding replacements for creative directors can be a long and arduous task. LVMH (TLO: LVMH.TI - news) 's Dior took more than a year to do so after sacking star designer John Galliano for a drunken anti-semitic rant in a Paris bar in 2011.

Mulberry's chief executive Bruno Guillon left in March, prompting Chairman Godfrey Davis to step in to run the group until a replacement was found.

But the group this week took steps to strengthen its board by hiring as non-executive director the luxury industry veteran Thierry Andretta, former chief executive of French fashion brand Lanvin and now head of Italian jeweller Buccellati.

Created in 1971 in Somerset, southwest England, the Mulberry brand is named after the tree which founder Roger Saul walked past each day in the grounds of his school. Today, it s 56-percent owned by Singapore billionaires Christina Ong and Ong Beng Seng.

The brand still makes between 60 to 70 percent of its sales in the UK but plans to pursue its worldwide expansion by opening this year three shops in continental Europe and two in the United States and a flagship in Paris in 2015.

Mulberry shares were barely moved in morning trade, up 0.2 percent at 709.50 pence by 0934 GMT. ($1=0.5956 British pounds) (Editing by Greg Mahlich)