Mulberry looks east for growth, expects revenue pick-up in 2019
British handbag maker Mulberry expects sales to start growing again next year thanks to a boost from Asia where it has significantly expanded its presence both online and offline, its chief executive told FashionNetwork.com.
Last week, Mulberry posted an 8 percent drop in half-year sales hit by weak trading in the UK and the loss of concessions at department store chain House of Fraser, which went into administration earlier this year.
“This is actually a growing phase for us… We should start seeing sales climbing up again next year,” Mulberry Chief Executive Thierry Andretta said in an interview on the fringes of the New York Times luxury conference in Hong Kong.
As of next year, South Korea will become Mulberry’s second biggest market after the UK, replacing the United States, after it opened new shops and points of sales there now totaling 19. In September, the British brand replaced its traditional London fashion show by a catwalk event at the K Museum of Contemporary Art in Seoul tthat coincided with the opening of corners and a pop-up store selling capsules and a selection from its latest collection. Andretta said Mulberry was keen to continue tapping into consumers’ appetite for “see now, buy now” - purchasing things straight off the runway - which he regarded as a natural evolution of the market.
Looking forward, he said Mulberry’s plan was to reduce its dependence on the UK, hit by weak demand and concerns about Brexit. If its home market made up around 68 percent of revenue, Andretta said he aimed to see that figure drop to around 50 percent within three to four years.
“We are moving to Asia because this is where the growth is coming from now,” Andretta said. Mulberry has been expanding in Hong Kong, China and Japan and is planning on opening a new shop in New York. Andretta said Mulberry would have 53 stores in Asia by the end of this year, up from 29 last year. Mulberry has also signed partnerships with important Chinese online players such as Toplife, JD.com’s luxury platform as well as Secoo and VIP.com.
Andretta said online sales represented 17 percent of total interim sales (up from 9 percent four years ago) and rose 5 percent in the period to Sept. 30.
Mulberry’s design team is headed by Johnny Coca who joined from Celine where he led leather goods design. Andretta, a fashion veteran who used to run Lanvin and LVMH’s Celine, was hired in 2015 to revive Mulberry. On top of expanding in Asia, his strategy is to position Mulberry as a quintessential British brand that makes products that offer value for money because they can be repaired. Around half of Mulberry’s products are made in Somerset with the rest made elsewhere in Europe.
Mulberry, known for its classic brown leather bags with locks inspired by a postman’s satchel, was founded in 1971 in Somerset, southwest England. The brand is named after the tree which founder Roger Saul walked past each day in the grounds of his school. It is controlled by Singapore billionaires Christina Ong and Ong Beng Seng.
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