Leather at the core of Mulberry’s long-term strategy

Worldwide
Published:  07 December, 2017

Total revenue for the British leather handbags manufacturer stood at £74.6 million (US$100 million) in the first half of 2017, in line with the prior year, but pre-tax losses have widened. 

Mulberry’s retail sales, including digital, were up 2% to £56.6 million (US$75.85 million) for the period (2016: US$74.26 million) with like-for-like sales down -1%. The UK Retail business is reported to have observed an increase in tourist spending in London while domestic demand slowed. International Retail sales were up 8% in the first half of the year, with a pursued product portfolio development and the addition of stores in Hong Kong. Global Digital sales were up 3% to £10.7 (US$14.33 million) million for the period (2016: US$13.93 million), accounting for 14% of Group revenue.

A focus on full price sales and new products, with lower markdown sales during June and July, is said to have contributed to the increase in gross margin to 61.5% (2016: 59.1%). Net operating expenses for the six months increased to £46.6 million (US$62.47 million) from £44.6 million (US$59.75) a year earlier, attributed to a higher level of investment in marketing and the retail network. Pre-tax losses widened to £0.6 million (US$804.44 million) from £0.5 million (US$670.39 million) a year earlier.

Mulberry says leather goods are the core commercial focus, and it has the intention to continue to develop and build on recent strong launches with a continued refinement and enhancement of core and new ranges.  This approach is to include a steady pace of evolution of key icons as well as the introduction of new signatures, such as the "Rider's lock", which was recently launched as a key feature of the new Amberley bag range.

“We continue to invest in our Somerset (UK) factories and have created an Artisan Studio that showcases our distinctive British craftsmanship on special and limited-edition products. We continue to see strong demand from tourists in London and whilst the UK remains uncertain, the Group remains in a strong position to invest in further developing the customer experience in key international markets and enhancing its unique UK design and manufacturing base”, said Thierry Andretta, CEO, Mulberry.

The Group’s objective over the longer term is to reinforce Mulberry as a lifestyle brand by strengthening complementary categories to its core leather goods ranges. The key focus categories are footwear, ready-to-wear, soft accessories and jewellery. As part of the initiative to further develop these relatively new categories, the Group says it will continue to invest in targeted product development and marketing.

Mulberry's Amberley Hobo features a front pocket that detaches into a compact cross-body bag.
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