LONDON — Stock market turmoil has delayed Mulberry’s U.S. expansion plans.
This story first appeared in the July 26, 2002 issue of WWD. Subscribe Today.
The British women’s and men’s ready-to-wear and accessories firm said its Singapore-based partners Ong Beng Seng and Christina Ong had decided to “hold back” on plans for a store rollout until the economic outlook is clearer.
“We don’t know how long the plan will be on ice,” said Roger Saul, Mulberry’s chairman and chief executive officer, in a telephone interview. “In January, everyone was optimistic, but after the recent turbulence in the U.S. stock market, they’re taking a wait-and-see approach.”
Mulberry had planned to open five stores in the U.S. over the next few years, with the first — a Manhattan flagship — slated to open this fall. The Ongs, who have a 41.7 percent stake in Mulberry, planned to provide the working capital for the retail company Mulberry USA.
“It’s disappointing because we will lose the projected sales growth and revenue from the new store. At the same time, there was no point in going ahead with those plans in a climate like this,” said Saul.
He added, however, that Mulberry’s U.S. business in home furnishings fabrics — distributed through Lee Jofa Inc. of New York — is flourishing. “It’s storming along, and has grown 35 percent over the past year. That success has given us the confidence to go forward with our retail rollout — when the time is right.”
Saul also said that Nicholas Knightly has joined Mulberry as women’s wear designer and that his first collection will bow for fall 2003. Knightly, who designed his own line in the early Nineties and subsequently worked for Ghost and Margaret Howell, is on track to become design director, Saul added.
Mulberry also released its preliminary results earlier this week. In the fiscal year ended March 31, 2002, it posted a net loss of $2.6 million compared with net income of $451,500 last year. Sales grew 8 percent to $42 million. Dollar figures have been converted from the pound at current exchange rates.
The company attributed the loss mainly to one-time costs such as the closure of stores in Tokyo and Brussels, and the loss of revenue linked to the refurbishment of Mulberry’s Bond Street store, which was closed for 18 weeks.
Meanwhile, Mulberry has stuck to its European expansion plan with a store opening in Copenhagen in April, and plans to open three units in Russia, The Hague and in Scandinavia later this year.