Mulberry Sales, Profits Bounce Back in H1, with New Stores Planned
LONDON – Mulberry returned to pre-pandemic growth in the fiscal first half, and swung back into the black, posting a profit of 7.3 million pounds, compared with a loss of 2 million pounds in the corresponding period last year.
Revenue in the six months ended Sept. 25 rose 34 percent to 65.7 million pounds year-on-year, and was 3 percent higher than in 2019.
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Retail revenue from Mulberry’s own channels was up 30 percent in the period, and the momentum has been building in the second half. Retail revenue was up 35 percent in the 8 weeks to Nov. 20, due to improving store sales, a strong digital performance and continuing growth in Asia.
Mulberry shares on the London Stock Exchange rose 26 percent to 3.80 pounds in mid-morning trading.
The brand has consolidated and restructured, putting the focus on digital, and is pursuing a sustainability agenda called Made to Last, which has seen it set environmental targets; sharpen up sourcing and supply chain management; and jump into the circular economy with resale and restoration programs.
The company said Wednesday that its “Preloved Bags,” a collection of second-hand styles that launched in early 2020 with an exhibition at the Bond Street flagship, are now available across all sales channels.
Earlier this week, the company launched a version of the Amberley bag made with low carbon intensity leather, in partnership with the Scottish tannery Muirhead.
“I am proud of Mulberry’s performance during the period,” said chief executive officer Thierry Andretta. “Our long-term strategy, namely our innovative and sustainable products made in our carbon neutral Somerset factories, our market-leading omnichannel distribution model, and our expansion into Asia Pacific, has delivered a strong financial performance.”
Andretta said that product innovation and sustainability were now “central” to the company’s strategy. He said “The Lowest Carbon collection” is part of its Made to Last manifesto, as is the goal to reach zero carbon emissions by 2035.
In a telephone interview on Wednesday, Andretta said that Mulberry remains committed to keeping the prices of its sustainable collections in line with those of its traditional leather ones, even if they do cost more to produce.
He said that Mulberry wants to be “fully transparent” with the customer, and believes that shopping sustainably should not carry an extra financial burden.
Andretta added that Mulberry’s decision to focus on its U.K. production capabilities means the company is “well placed for the festive trading period, and beyond.”
Mulberry is majority-owned by the Singaporean billionaire Christina Ong, who holds a 56 percent stake.
The company’s turnaround in the first half follows a difficult 2020: the company waved goodbye to its designer Johnny Coca, who moved back to Paris to work for Louis Vuitton; laid off some 25 percent of its staff during the first lockdown in the U.K.; and terminated its ready-to-wear and footwear licenses as it put increasing emphasis on accessories, and sustainability.
In the first half of fiscal 2021-22, Mulberry saw double-digit increases in retail sales in its major markets. In the U.K., they increased 36 percent, while in China they were up 38 percent, contributing to a 23 percent uptick in Asia Pacific overall. In the U.S., retail sales increased 57 percent.
During the period, international retail sales generated 40 percent of group revenue, while digital accounted for 29 percent.
On the sustainability front, Mulberry said the Lifetime Service Center at The Rookery manufacturing hub in Somerset is restoring more than 10,000 bags a year.
The company added that some 86 percent of the collection now boasts leather and suede sourced from environmentally accredited tanneries, and that figure is on track to increase to 100 percent by the fall 2022 season. All other, non-leather, materials are fully sustainable.
Mulberry has said it wants to become “the leading responsible British luxury brand, and a pioneer in sustainability.” The plan is to transform its business into a regenerative and circular model encompassing the entire supply chain “from field to wardrobe” by 2030.
“We believe the opportunity is substantial, and we have taken a progressive leadership position in this space, investing in products that are made to last, and offering customers circular repair and buy-back options through the Mulberry Exchange,” the company said.
Profit before tax was 10.2 million pounds in the first half, compared with a loss of 2.4 million in the corresponding period last year, and included a profit of 5.7 million pounds following the disposal of the lease on the Mulberry store in Paris.
During the six months, it opened seven doors internationally and closed seven, including its Paris unit. Andretta said that Mulberry had an opportunity to shut the Paris store at 275 Rue Saint Honoré when the entire building was purchased, and took advantage due to low tourist traffic in Paris.
The company is currently looking for new store space in the French capital, and Andretta said it will open with a new concept. “Paris is a capital city, and of course we want to be there,” he said.
The company is moving forward in other markets. In Manhattan, it plans to leave its current location at 134 Spring Street and take over the former Balmain space at 100 Wooster Street. Andretta said the store should open by April.
In China, digital sales represented 43 percent of total revenues in the country. Mulberry launched a WeChat program which it views as a long-term proposition “with the aim of building brand awareness in the region, with content regularly updated and tailored to relevant campaigns, products, and customers.”
During the six-month period, the company opened four physical retail stores in China: at the Beijing World Financial Center; Beijing Shin Kong Place; and Wuhan Heartland 66. It also opened a pop-up in Chengdu International Finance Square. A further opening in Shanghai International Finance Centre is due to open in November 2021.
Mulberry added that it is refining its physical store network, which numbers 113 points of sale, including retail and franchise. It has been rolling out a new concept that includes customer-facing technology; creates more space; and supports the brand’s omnichannel proposition. The company said the new concept stores have been outperforming its more traditional outlets.
