Reversing the strategy of its former chief executive Bruno Guillon, the Somerset-based luxury brand said it will look to focus its sales efforts on offering products at more affordable prices.
It warned that this will have a short-term "material" impact on profits but that the change was necessary to ensure the future strength of the Mulberry brand.
The new strategy was 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 Mr Guillon's leadership, the company bid to make itself more exclusive 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.
Following her appointment in 2008, Ms Hill was credited with turning the firm from a trusted briefcase and wallet maker into an international fashion powerhouse with a clutch of celebrity fans.
The company's best known product of recent times has been the Alexa bag - inspired by style icon Alexa Chung - while its Del Rey bag was inspired by American artist Lana Del Rey.
Mulberry shares fell 4% after today's latest profits warning and have more than halved in value since the start of 2013.
Mr Davis said there will be a material adverse impact on profits whilst the brand momentum rebuilds.
He will slow the rate of store openings to five for the 2014/15 financial year, from eight for 2013/14, in order to control costs and enable existing stores to gain traction.
He added that Mulberry's new factory in Somerset, which opened in June, was now fully operational with more than 300 workers.
Mr Davis said: "Following the recent change in management, we are focussing on achieving sales growth through the reinforcement of our product offering at more affordable prices to meet the expectations of our loyal customers.
"This will have short term financial consequences but is necessary to ensure the future strength of the Mulberry brand."