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Mulberry profits surge with lower-price strategy

Mulberry’s sales increased 5% to £155.9m and its pre-tax profits jumped 226% to £6.2m for the year to March 31, demonstrating that its commitment to “core pricing” is paying off.

Mulberry

Mulberry

Mulberry

The premium leather goods brand, which started to shift more of its product mix to below to retail at below £1,000 last year, grew retail sales by 8% to £118.7m. Wholesale sales fell 4% to £37.2m during the period.

For the 11 weeks to June 11, total retail sales were up 9% on last year, or by 4% on a like-for-like basis.

The company launched the first collection from new creative director Johnny Coca at London Fashion Week in February this year and said designs will continue to follow core brand values, while introducing a greater level of novelty in the range of bags in coming seasons.

It has pledged to shorten the lead time between showing new collections and delivery to sales channels.

Mulberry said it is committed to “made in England”’ and will manufacture around 50% of its handbags in the UK going forward. As its UK factories are already approaching full capacity, new facilities are likely to be needed as its revenues increase, it said.

It has signed a licence agreement to manufacture and co-distribute Mulberry ready-to-wear and shoes from autumn 16.

Mulberry currently has 124 owned and partner stores. It will slow its rate of store openings, while refining its store portfolio and improving its omnichannel services. It is starting a project to connect retail and digital stock from August 2016 and will trial making stock universally available between the two in UK standalone stores from spring 17 onwards.

The company is launching a US website this summer with local fulfilment, following a European version in April.

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