Mulberry hurt by declining sales in home market

Worldwide
Published:  15 June, 2018

The British leather goods and accessories brand, whose 70% approximate sales are in the UK, says tourists are spending elsewhere in Europe.

Mulberry’s comparable retail sales fell -7% in the 10-week period to June 2, while sales outside the UK rose +1%. Thierry Andretta, CEO, Mulberry, says the products have been sold at full price during the period, with no discounting, and he remains confident about a turnaround in the near future as the proportion of sales in the domestic and international market will soon reach a 50/50 ratio.

The international pace is said to have increased with new entities established in China, Hong Kong, Taiwan and Japan. Mulberry has also announced a new majority owned business in South Korea to develop the Korean market with SHK. “Our international business is growing and following the completion of this set up phase in Asia, we will focus on omni-channel, digital partnerships and marketing investment in the region”, said Andretta. “Following another period of cash generation, our balance sheet is strong. Although the UK market remains challenging, we will continue to invest in our strategy to develop Mulberry into a global luxury brand to deliver increased shareholder value."

The Company’s preliminary results for the year ended March 31, 2018 show a reported profit before tax of £6.9 million (US$9.15 million), compared with £7.5 million (US$9.95 million) in 2017, while gross margin increased 185 basis points to 63.5%. Group revenue grew +1% to £169.7 million (US$225.23 million) from £168.1 million (US$223 million) in the period.