When I was younger, Mulberry was an aspirational brand for me. I loved the non-bling nature of its bags (even in the days before the word bling was invented) but I could never afford one. By the time I could afford one (or at least by the time I had a credit card), the company had put the prices up and seemed to be trying to reinvent itself.
But that strategy didn’t work and it suffered a bruising period of profit plunges before deciding to go back to what it does best. Has the new/old strategy worked? Read on…
Well, the simple answer is yes. Luxury handbags may be having a tough time of it but Mulberry is riding high(ish) again. It said today that sales and profits in the year to March 31 rose and the new financial year is off to a great start with sales up 9% so far.
A year ago it made a net loss of £1.4m but this time it’s been able to report a profit of £2.6m with group sales up 5% to £155.9m and retail sales up an even better 8% to £118.7m. Importantly too, online sales rose 19% to £21.4m and now make up a hefty 14% of group sales.
So what went right? Well, first of all let’s go over what went wrong. A few years back, the execs at Mulberry decided it would tap into a bit of what Gucci, Prada and others were enjoying and started making bags with stratospheric prices and with what was (to me) a depressingly OTT amount of hardware. I thought the hardware obsession was very un-Mulberry and consumers seem to agree, staying away in their droves.
Cue plunging share price and management changes.
So now it’s time for what Mulberry has done right. For a start it got back to more affordable pricing. Not that it’s cheap (it never has been) but you no longer have to take out a mortgage to buy a Mulberry bag.
It’s also got a new creative director. Johnny Coca joined from Céline, which is as good a testimonial as any and also worked at Michael Kors (so he knows about bags with too much hardware on them!) He’s been quietly tweaking the bag designs to update them in line with the anti-bling Mulberry style and its seems to be paying off. Mulberry said today that both customers and press have responded well to what he’s done so far.
In some ways it’s a similar approach to what Stuart Vevers has been doing at Coach with both brands putting value, good design, practicality, an undeniable aura of cool at its heart.
Coca has even done the unthinkable and redesigned the Mulberry Bayswater bag. It now comes with extendable sides, among other details, and if that reminds you of Céline’s Trapeze, doesn’t almost every bag these days?
It’s early days yet but today’s results point to bigger and better things. Let’s keep our fingers crossed.