LONDON — After a nasty shareholders’ battle and years of losses, the British accessories and ready-to-wear brand Mulberry is back in action.
The company, which will make its major U.S. debut at Bergdorf Goodman this fall, has posted a profit for the first time in three years, and there are plans to double the size of the business by 2009.
In the fiscal year ended March 31, profits rose to 31,000 pounds, or $56,420 at current exchange, from a loss of 2.2 million pounds, or $4 million. Operating profits rose to 540,000 pounds, or $983,000, from a loss of 1.7 million pounds, or $3 million, the company said in a statement last week.
Sales, however, dropped 10 percent to 25.3 million pounds, or $46 million, from 28.2 million pounds, or $51.3 million, due to the elimination of loss-making sales channels, reduced clearance sales of discounted lines and more limited distribution of the men’s and women’s rtw collections.
Meanwhile, the current fiscal year already is showing growth. Like-for-like sales in Mulberry’s shops during the first two months were up 4 percent.
“We’ve shaped up the business model and now we’re going for growth,” said Lisa Montague, Mulberry’s chief operating officer, who plans to boost sales to 50 million pounds, or $91 million, over the next five years.
“We’ll be strengthening the brand and getting the positioning right in each market,” said Montague in a telephone interview. She added that Mulberry also wants to be perceived as a “cool British brand,” and be the “authority on all things tactile.”
The bulk of Mulberry’s bags are made in the company’s factory in Somerset, England, from leathers that are vegetable-dyed and heavily drummed, giving them a worn finish with a vintage feel. Mulberry gives customers a tube of cream to rub into the bags to nourish the machine-battered leathers.
Mulberry is already in Bergdorf Goodman with a pre-fall selection of Roxy bags, and will hold a fall launch party there on Sept. 8. The line is being sold in the 58th Street store alongside Marc Jacobs, Celine, Bottega Veneta and Hogan.For spring, the collection will be sold at stores including Barneys in New York, Los Angeles and Chicago and at Fred Siegal. Mulberry’s fall ad campaign was shot by Paolo Roversi and stars Missy Rayder. It will break in the September issues of British Vogue, American Vogue and Vanity Fair.
Mulberry has formed a joint-venture company — Mulberry USA LLC — with its main shareholders, Ong Beng Seng and Christina Ong, for distribution to U.S. wholesale clients. Mulberry has been eager to expand into the U.S. for more than two decades under its former owner, Roger Saul, and he initially linked up with the Ongs to do so, but then fell out with them and in 2002 parted ways with the company he founded. He was succeeded as chairman and chief executive officer by Godfrey Davis.
Montague said she’d eventually like to see the U.S. market generate a minimum 20 percent of Mulberry’s sales. “In fact, I’ll be disappointed if that doesn’t happen,” she said.
The Roxy, one of the company’s bestsellers, is boxy with outside pockets and buckles, while the Bayswater, another big seller, has the feel of a Kelly bag — but is far more relaxed.
The Roxy retails for about 595 pounds, or $1,082, while the Bayswater sells for 495 pounds, or $900.
Currently, the business is made up of 70 percent accessories and 30 percent rtw, and Montague said the company plans to remain accessories-driven. The bulk of sales are in the U.K., where there are 13 Mulberry stores, and northern Europe.
Future growth will come from southern Europe, North America, Asia and Japan, she said.
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