Getting Mulberry back on track

4th Dec 2014

Photo credit: My-Retail Media

Mulberry sees sales fall 17% for H1, but “return to growth” in sight.

Luxury British brand Mulberry saw sales fall 17 per cent in the first half to 30 September, after a push to reposition the brand further upmarket backfired.

The retailer, who has been lauded in the past for its ability to create aspirational ‘It bags’ and accessories for both the British and international consumer, posted a loss of £1.1 million in its first half, compared to a pretax profit of £7.2 million a year before.

Sales fell 17 per cent with margins also down, as it looked to sell more of its lower-priced bags in order to win back customers initially put off by its new price points introduced by former chief executive Bruno Guillon.

UK retail sales, which make up 60 per cent of its overall sales, fell 16 per cent excluding online, as Mulberry found its full price stores saw a decline in footfall, especially with tourist shoppers, down 12 per cent.

International retail sales excluding online rose 20 per cent to £7.5 million, thanks to new stores, while online sales rose 1 per cent to £6.6 million, now representing 10 per cent of group sales.

Mulberry chairman Godfrey Davis, who has acted as chief executive during some of the company’s more turbulent times in the past year, said on Thursday that the lower-price adoption had already got off to an “encouraging” start, with total retail sales up 8 per cent in the nine weeks to 29 November on a like-for-like basis.

Davis added:“We have worked hard to re-engage with our customers and our tongue in cheek Christmas video #WinChristmas has been viewed well over one million times.

“After a difficult couple of years, the steps that we have taken to return Mulberry to growth are beginning to bear fruit and looking further forward, we expect to gain further momentum from the appointment of Johnny Coca as our new Creative Director."

Outside of some rollercoaster sales, Mulberry launched three new directly operated international stores since 30 September, in Dallas, Frankfurt and Paris, as well as introducing a Click & Collect service across full price standalone stores in the UK.

There was a time about two years ago, when Mulberry was regularly mentioned alongside Burberry as brands that could seemingly do no wrong. As shares closed at 780 pence on Wednesday, down 21 per cent on a year ago, the company may have some way to go before it is truly back on track.

Ava Szajna

My-Retail Media

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