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.
Supermodel @helenachristensen teamed up with longtime friend and designer @camillastaerk on a joint @paredeyewear collaboration. The lineup features three styles and 11 offerings, all of which embody a vintage feel. Get all the details on how they celebrated the collab on WWD.com. #wwdaccessories #wwdeye (📷: @slovekinpics)
“It’s a hard industry to keep motivated, as well, so finding different subjects and people is what makes it worth it – when you’re like, oh, I’ve met great people, I feel like I’ve done something good, and I feel proud of having done this,” said French actress Stacy Martin on being grateful for the variety of roles she’s take on. Read @ktauer’s full interview with Martin on her her latest film “Godard Mon Amour.” #wwdeye (📷: @danieldorsa)
After showing in front of the Eiffel Tower for his last two women’s ready-to-wear collection, it looks like @anthonyvaccarello may be heading to the Big Apple. Sources say the designer will stage his next @ysl show in NYC on June 6. Get all the details on WWD.com. #wwdnews #wwdfashion (📷: @aitorrosasphoto)
EXCLUSIVE: Two and half months after John Targon, cofounder and codesigner of Baja East, was hired as creative director of the contemporary division at Marc Jacobs, he has left the company, WWD has learned. Marc Jacobs International, which is owned by LVMH Moët Hennessy Louis Vuitton, confirmed Targon’s departure in a statement: “John Targon is a talented designer and we appreciate the work he has done here. Ultimately working together did not make sense for the brand and we wish him the best.” Read the story by @jessiredale, link in bio. #wwdnews
@theluxurycollection is officially launching a collection, tapping Sofia Sanchez de Betak for the capsule. Over 30 styles will be featured in the Chufy x The Luxury Collection, debuting next month at Bergdorf Goodman, The Webster, FiveStory and more. De Betak, known as “@chufy,” drew inspiration for the collection from her trips to Japan in the past year #wwdfashion
@lhd, founder and CEO of @thewebster, has teamed up with @lebonmarcherivegauche for the European launch of her ready-to-wear line, LHD. The launch will come with an exclusive pop-up opening today that’s set to run through May 20. Located on the second floor, it carries her debut Miami-themed resort collection, launched in November as see-now-buy-now. #wwdfashion