“Please let Mulberry’s turnaround work,” I thought to myself as I opened the notification of its latest half-year report this morning. You see, despite the brand’s attempts to compete with the Pradas and Guccis and squeeze ever-higher amounts of money out of its customers in recent years, like many people in the UK, I do have a soft spot for Mulberry.
Its declaration that it would offer more products in the ‘affordable’ bracket was always going to cheer lapsed, cash-poor shoppers like me. So has Mulberry pulled it off?
Yes. It’s not out of the woods yet but sales are rising and its profits margins are up too, despite those lower prices, which means it must be attracting more customers into stores and online.
So what’s the story? In the six months to September 30, revenue rose 5% and CEO Thierry Andretta said he’s feeling confident that the rise will continue, although that confidence comes with the usual warning that it all depends on Christmas trading (of course).
The company said the rise in its retail stores has been encouraging and was enough to offset a decline in wholesale caused by distribution costs and lower orders from Asian retailers.
And the actual figures? Underlying revenue was £67.8m and it swung to a pre-tax profit of £100k. OK, that’s not a lot but it’s a darned sight better than the £1.1m loss a year ago. It was helped by a gross profit margin up to 61.5% from 59.9%.
Digital sales increased by 20%, representing 12% of group sales compared to 10% a year ago. And the firm said it’s seen efficiency gains in its UK factories that now produce around 50% of its handbags.
The second half has started well too with comparable sales up 5% in the first 10 weeks, an impressive figure in a tough market.
Of course, all this good news comes even before Johnny Coca, the new creative chief who joined from Céline, has put any of his product on the shelves. We’ll have to wait until February to see that.