LONDON — After a trying first half, the tide seems to be turning for Mulberry, which warned in October that sales and profits would fall short of market expectations.
On Thursday, the company said profits declined 35 percent to 7.3 million pounds, or $11.6 million, in the six months to Sept. 30.
The decline was due to higher operating costs as Mulberry upgrades its distribution network, more cautious ordering from its Asian franchise partners due to a slowdown in demand and tough comparative sales.
Revenue in the period rose 5.6 percent to 76.5 million pounds, or $120.9 million, on the back of increased U.K. and international retail sales. All figures have been calculated at average exchange rates for the six months.
The second half is off to a solid start: The company said retail revenue climbed 19 percent in the first nine weeks to Dec. 1, with same-store sales up 11 percent.
Bruno Guillon, Mulberry’s new chief executive officer, said the downturn in profits is part of a bigger strategic story.
“Our big challenge is turning Mulberry into a global luxury brand, a global success story,” he said. “It’s been a fantastic success story in the U.K. and we need to attract new customers without losing the existing ones. And we are working on building sustainable, long-term growth. Our challenge is how to remain an English brand but still be understandable to the Chinese, German and American customers.”
Part of that work, he said, has involved “rationalizing the wholesale network, because it has to be consistent with our retail stores — some of our partners were just not in line with our strategy, but we have some very good wholesale accounts such as Selfridges, Le Printemps and Le Bon Marché.”
He said the wholesale cull was an ongoing process and, “I hope I don’t have to do too much more in the future. In the end, our strategy is all about consistency, quality and defending the brand.”
Mulberry has also upgraded its outlet business and is no longer making product specifically for outlet stores, which has impacted financial performance in the short term.
Guillon, who was formerly managing director of Hermès France, said Mulberry’s retail expansion was on track, with a total of 17 to 20 new stores planned for the current fiscal year, and “around 20 store openings” planned each year for the next four to five years.
So far this year, stores have opened in markets including Singapore, San Francisco, Zurich and Berlin.
A new Joan Rivers coffee table book, titled “Joan Rivers Confidential,” gives readers never-before-seen photos and letters of the late comedian throughout her life. “Because of her drive to always be fresh, she kept records of every appearance, every performance, all the jokes that were used on TV, all the clothes that were worn,” said Rivers’ daughter Melissa. Here, Rivers poses at the “Tonight Show” in Tracy Mills in 1985. Read more about the book and see more photos at WWD.com. #wwdeye
After a career at New York hot spots like Narcissa, Dovetail and Nix, @chefjfraser has expanded to the West Village with The Loyal, a modernized take on an American brasserie. “And as I’ve gone through my career I’ve felt some departure from that kind of simple, straightforward [cooking]. This is meant to take on the idea of ‘what if the American brasserie was invented today?’” #wwdeye (📷: @chinseephoto)
@bellahadid and @lilyaldridge at @bulgariofficial’s celebration on Friday night, toasting the brand's new Peter Marino-designed flagship on Fifth Avenue. The two-part event included a cocktail party at the store followed by a dinner at a mystery location — the Met Cloisters. #wwdeye
From overseeing America’s fastest-growing speciality retailers to codifying cool, WWD talked to the women who are leading the way for the future of beauty. Check out our Instagram Stories to see how these women built today and are creating tomorrow. (📸: @hannah_khymych) #wwdbeauty
For @laperlalingerie's spring 2018 show, the brand chose to host their event at @thevenetianmacao. With Chinese megastars @bingbing_fan and @hubing in attendance, La Perla debuted a rock ‘n’ roll-inspired collection. The show marked the start of Sands Macao Fashion Week, which runs from October 19 to 24 — the city’s first such event. Pictured here are models backstage with glimmering eyes. #wwdfashion (📷: Cheuk-Yin To)
Trending for spring 2018: top stitch design. Gone are the days of stitch just for seams — designers are using the once-minimal detail to create strong decorative elements. (📷: Paola Testa; Styled by @andrew_shang) #wwdfashion
@tradesy is turning the concept of a showroom upside down with its new space in Santa Monica. Here, the company plans to hold events, art exhibits and a showcase rare fashion pieces like this Louis Vuitton boxing set. Get all the details on Tradesy’s first showroom on WWD.com. #wwdnews