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'Current trading shows strategy is working’, says Mulberry chairman

Mulberry’s UK retail sales have risen by 17% for the 10 weeks to June 6 against the same period last year, a result chairman Godfrey Davis attributed to the brand’s focus on colour and price.  

He was upbeat about the British luxury handbag company’s future, despite sales falling £14.8m to £148.7m for the full year to March 31 and a loss of £1.4m, compared with a profit of £8.6m in the same period in 2014.

He said: “There are no surprises with these results, and actually they are slightly better than people expected. Our current trading shows our strategy and the changes that we introduced at the start of the year are working.”

The company began to introduce more colour into the brand again and increased the amount of product priced under £1,000 after a move to a higher-end offering had been unsuccessful.

“Our colour selection wasn’t great, so we have added more life and vibrancy, while last year almost half our product was priced over £1,000 and today that figure is just under 29%,” he said.

“We have put a lot of creativity and newness into our lower-priced products, such as the Mini Lily clutch bag priced at £350 and the Tessie at £595.

“We still have those pieces above the £1,000 threshold, but it is about populating the pyramid to appeal to different people at different price levels. It is not an about turn but more fine-tuning the engine.”

Davis and Thierry Andretta, who became chief executive in April after working with the brand as one of its non-executive directors since June 2014, are now awaiting the arrival of new creative director Johnny Coca next month.

Head designer for leather goods and accessories at Céline, Coca is set to join on July 8, with responsibility for all of Mulberry’s collections.

Andretta said Coca will seek to reinforce the British heritage of the brand, as well as increasing attention on shoes and ready-to-wear in addition to its core handbag collections.

The company’s online offer is another area of focus, with digital sales increasing by 15% in the year to March 28, and by a further 40% for the 10 weeks to June 6.

“Over the last two years we have moved to a more sophisticated online platform, which can tell what device you are using, and improved the photography. We will be further enhancing the navigation by the end of the year too.”

Davis said Mulberry had introduced click-and-collect and return-to-store in the UK, which had added “a few percent to sales” and that the firm would be rolling this out to other territories later this year.

The company’s second UK factory, which opened in June 2013, is now operating at full capacity. It expects to open new factories in the UK as sales grow.

“We now have 700 people in two factories in Somerset, producing around 50% of our handbags. We’re almost full now, so this is something we’re hoping to look at in future, although there are no plans in place as yet.”

@Tara_Hounslea

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