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Mulberry Expands as Product Demand Rises

Mulberry Group plc is reaching into new markets as it struggles to keep up with demand in more established ones.

LONDON — Mulberry Group plc is reaching into new markets as it struggles to keep up with demand in more established ones.

The British accessories and ready-to-wear group said in a statement Thursday that sales at Mulberry’s U.K. stores were up 36 percent in the nine weeks to Dec. 1, compared with the corresponding period last year. Mulberry did not provide exact sales figures.

The company added that, despite increasing manufacturing space, changing production methods and investing in new machinery at its factory in Somerset, England, it was unable to keep up with demand for its purple patent Bayswater bags.

The new Mabel bags were also a big driver of sales in the first half, it said, and the spring accessories wholesale order books are up 6 percent on the previous year.

And the brand continues to push forward: “Our program of reinvesting in the business is already benefiting the company, and customer awareness in Asia and the U.S. is growing,” said Godfrey Davis, chairman and chief executive officer. “The group continues to make steady progress while the foundations for international growth in the medium term are laid.”

In the Middle East, Mulberry has recently joined with the Chaloub Group, a luxury brand distributor for the region. New shops will open in Jeddah, Saudi Arabia, and in Kuwait over the next six months.

In addition, the brand will open stores in Hong Kong, Singapore airport and Shanghai and in two department store corners in South Korea over the next six months.

Mulberry already has growing businesses in Asia and in the U.S., where it has opened five shops in the last 12 months. The statement said no more stores would open in the U.S. until Mulberry has “successfully built awareness” through advertising, public relations and marketing activities.

In the first half ended Sept. 30, sales grew 4.2 percent to 21.5 million pounds, or $44 million, from 20.7 million pounds, or $42.2 million, driven in part by a 38 percent rise in U.K. retail shop sales. Sales growth also came from the new U.S. units and two department store corners in South Korea, which also opened in the first half.

Mulberry, however, saw profits plummet 44 percent to 815,000 pounds, or $1.7 million, from 1.5 million pounds, or $3.1 million, due mainly to “substantial” advertising, marketing and administrative expenditure linked to the new store openings in the U.S. and Asia, according to Davis.

As reported, Emma Hill has been named Mulberry’s creative director, replacing Stuart Vevers. Hill will make her debut with the spring 2009 collection and will oversee all creative aspects of the company. She has previously worked at Marc Jacobs, Marc by Marc Jacobs, Calvin Klein, Chloé and Gap.