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.
“My personal philosophy to beauty is paying attention to oneself. I love to be outdoors, lots of fresh air, trying to take care of yourself as best you can. I always notice that comes through,” says Felicity Jones, the global face of @shiseido-owned @cledepeaubeauteus, which launches today. Head to WWD.com to read more about the actress’ love for beauty and how she prepared for her new role in “The Basis of Sex,” playing the young Ruth Bader Ginsburg. #wwdbeauty (📷: @dandoperalski)
For men’s fall 2018, @giuseppezanotti drew on elements from streetwear, sport, biker, combat and rock ‘n’ roll. Pictured here are a pair of shoes from the collection, featuring zippers, rhinestones, and silver hardware. Head to WWD.com to see a roundup of the accessories from Milan’s men’s fall 2018 shows. #wwdfashion (📷: Andrea Delb)
To celebrate the 25th anniversary of @ralphlauren’s snowboarding collection, the brand is mining its archives. The iconic brand is reintroducing vintage styles and dropping new designs for a color capsule that will be available in Ralph Lauren stores and @openingceremony on January 25. The capsule will consist of 10 pieces, including the Snow Beach Pullover, pictured here, which is a collector’s item that rapper Raekwon wore in Wu-Tang Clan’s “Can It Be All So Simple” video. #wwdfashion (📷: Tom Gould)
For @rochasofficial’s pre-fall 2018 collection, creative director Alessandro Dell’Acqua channeled the sophisticated and intriguing Catherine Denevue in the film “Belle de Jour.” Polished collarless coats, midi skirts, suits and ’60s graphic motifs were all featured in the collection, adding a sense of discreet luxury. See the rest of the photos on WWD.com #wwdfashion
“We tried to produce clothing of that couture quality, but the most daunting part was that we only had a matter of days [to do it],” said costume designer Lou Eyrich, who recreated Gianni Versace’s iconic looks for @americancrimestoryfx. Eyrich searched online retailers and vintage shops for original pieces from the design house and for @penelopecruzoficial, who plays Donatella Versace. Head to WWD.com to read how she created the Versace world. #wwdfashion
Only three months after her stellar debut catwalk season, @kaiagerber has inked her first big design collaboration –– with @karllagerfeld. The collection blends Lagerfeld’s Parisian chic aesthetic and the model’s signature West Coast casual style via RTW, accessories, footwear and more. The #KarlLagerfeldxKaia collection will launch in September with a series of events. Get all the details on WWD.com. #wwdnews #wwdfashion
Harrods plans to remove the famous statue of Princess Diana and Dodi Al Fayed from the bottom of the Egyptian escalators and hand it back to Mohamed Al-Fayed. “We are very proud to have played our role in celebrating the lives of Diana, Princess of Wales and Dodi Al Fayed at Harrods and to have welcomed people from around the world to visit the memorial for the past 20 years,” said Michael Ward, Harrods managing director. “With the announcement of the new official memorial statue to Diana, Princess of Wales at Kensington Palace, we feel that the time is right to return this memorial to Mr. Al Fayed and for the public to be invited to pay their respects at the palace.” More on the news, with reporting by @loreleimarfil, at WWD.com. #wwdnews