Mulberry sees the recovery of Chinese business as lifting the blockade – WWD

LONDON – Mulberry CEO Thierry Andretta is optimistic about the brand’s future in China, despite the uneven start to the new fiscal year.

In the first 12 weeks, the British brand’s retail and digital sales revenue fell 1% due to COVID-19 restrictions in mainland China. Most of Mulberry’s stores were closed, as was the brand’s distribution center in Shanghai.

“In the beginning we had difficulties, but I am confident for China: the government is doing everything possible to promote business. Many of our stores have reopened, traffic is improving and the digital business is returning to normal. I am positive. We are developing in China, “Andretta said.

Not only China, which accounts for about 10 percent of sales, is raising Andretta’s mood. The growth and sustainability strategies it has introduced over the last five years and during the pandemic are paying off.

In fiscal 2022, profits more than quadrupled, while sales rose nearly 33 percent. The group’s total revenue for the first 12 weeks of the new year was 5% before 2022, supported by wholesale business, which grew by 29%.

In the 53 weeks ended April 2, revenue rose to 152.4 million pounds, while profit was 19.2 million pounds, including a one-time profit of 5.7 million pounds from the sale of the Paris lease.

Andretta added that while the economic and geopolitical prospects “remain uncertain”, Mulberry has a clear strategy “for future profitable growth that generates money”.

Shares of Mulberry rose 8.1% to 3.19 pounds in the morning trading on Wednesday and settled during the day, closing 1.7% at 3 pounds.

The years of the Mulberry pandemic were not easy: the British brand cut staff, closed shops and factories, said goodbye to its designer Johnny Coca and put its shoe and ready-made clothing collections as part of a major restructuring.

At the same time, Andretta has created a new strategy, focusing on high-end handbags made of green materials, focusing on the online channel, moving away from sales and promotions and setting a universal pricing policy in an attempt to be as transparent as possible with customers.

Discussing the results on Wednesday, he said the company had made great strides in its mission to be “Britain’s leading responsible lifestyle brand and a pioneer in sustainability”.

He described Mulberry products as “made to withstand the highest quality and lowest carbon materials in our factories in the UK”.

A look at the new Mulberry Softie bag.
Courtesy image

In fiscal 2022, retail sales in the United Kingdom increased by 36 percent to 89.8 million pounds.

Retail sales in China increased by 59 percent, while retail sales in South Korea increased by 11 percent, contributing to a total of 28 percent increase in the Asia-Pacific region. International retail sales rose 20 percent to 40.4 million pounds in the 12 months.

During the period, five new stores were opened in China and four in South Korea, and Mulberry noted its “continued growth and development” in the Asia-Pacific region.

In the last 12 months, digital sales have fallen to 47.5 million pounds from 56.4 million pounds, reflecting customers’ decisions to return to physical stores. Overall, digital sales rose 31 percent from pre-COVID-19 levels.

The board offers a final dividend of 3 pence per ordinary share, compared to last year’s zero dividend.

The company said that margins have improved over the past year due to the strategic focus on full price sales and increased volume efficiency.. He added that business and infrastructure have “responded well” to increased demand following the easing of COVID-19 restrictions.

Mulberry sees the resumption of Chinese business as

A look from the Mulberry Spring 2022 campaign.

As reported last year, Mulberry has launched The Lowest Carbon collection, which is made from the world’s lowest carbon leather using a local and transparent supply chain. This is Mulberry’s first capsule collection from regenerative “farm to end product” and the fruit of the brand’s Made to Last manifesto.

Andretta said Mulberry continues to try to be more sustainable and transparent.

Earlier this month, the company said it plans to introduce digital identification numbers in its leather goods products, starting with all the antique bags you already love.

As a member of the Sustainable Markets Initiative Fashion Working Group, Mulberry wants to deploy the technology in all favorite products by this fall and in the wider business by 2025.

A demo of the digital identification numbers was demonstrated at the recent World Summit on Fashion in Copenhagen.

Last month, Mulberry released its first carbon-neutral collection, Lily Zero. The 12 styles were created at Mulberry’s carbon-neutral factories in Somerset with leather from a tannery in Germany that measures, reduces and compensates for carbon emissions.

In the just concluded year, he also launched a resale program through all channels. The company said 88% of the collection now uses leather made from environmentally accredited tannins, and that figure will increase to 100% by the end of the 2022 calendar year.

The company is making additional investments in the Mulberry Lifetime service center at The Rookery in Somerset, England, which now recovers more than 10,000 bags a year.

Shore Capital notes in its report to Mulberry that the Somerset-based production of the brand has helped to isolate itself from all supply chain disruptions that plague the industry. Local production in the UK meant that the new Softie bag and Alexa’s latest style launched without delay.

Asked how customers react to universal pricing, Andretta said they have embraced it. “This is a generation of buyers who double and triple check prices and fully accept that prices are the same everywhere.”

He added that customers now perceive Mulberry as a luxury brand and there has been no price resistance.

“Sales of The Softie, one of our new styles, which is made with durable down and is aimed at the younger generation, are in line with other bags in the UK and internationally,” he said, noting that the price varies. from 1250 pounds to 1650 pounds and was well above the entry price of 995 for many styles.

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