Mulberry, the renowned British luxury fashion brand, has defied the odds and achieved positive half-year results despite the hurdles created by the COVID-19 pandemic. During the 26-week period until September 26, the company experienced a 29% decline in revenue as its physical stores were forced to shut down. However, amid the challenges, Mulberry found reasons for optimism. One standout achievement was the relaunch of its Alexa bag, a beloved product that now incorporates sustainable materials, which was met with a strong response from consumers. Furthermore, the brand witnessed a remarkable 68% increase in digital sales, amounting to £23.4 million, while its Asia Pacific retail sales grew by an impressive 28%.

Although Mulberry registered a pre-tax loss of £2.3 million, this figure marked a substantial improvement compared to the £10 million loss reported the previous year. The after-tax loss also narrowed to £2 million, down from £8.9 million. Mulberry credits these positive outcomes to its ongoing efforts to control costs and manage cash effectively, as well as its strategic investments in the burgeoning Asian market.

A closer look at Mulberry’s sales trajectory reveals signs of progress throughout the year. While the brand observed a 39% reduction in sales in Q1, the decline lessened to 18% in Q2. Although the proportion of digital sales to overall sales dropped from 67% in Q1 to 32% in Q2, it remained significantly higher than the 17% reported a year prior. An essential aspect of Mulberry’s response to store closures was harnessing its digital platforms to counter the impact, and the brand successfully recouped some lost outlet store sales by launching a digital off-price site in April.

Having temporarily closed some of its 111 retail and franchise partner stores due to lockdown measures, Mulberry acknowledges the continuation of sales trends from Q2 into October, with store sales gradually improving, robust digital performance, and consistent growth in Asia. In the eight weeks leading up to November 21, overall trading was down by 19% compared to the previous year, but notable double-digit growth occurred in both Asia Pacific retail revenue and digital revenue.

CEO Thierry Andretta underscores the importance of Mulberry’s long-term strategy to establish the brand as a globally recognized, sustainable luxury brand. This comprehensive approach encompasses enhancing their omnichannel network and digital platform, expanding their presence in Asia, and giving utmost priority to innovation and sustainability in products. Andretta applauds the successful use of Mulberry’s global digital network in replacing retail sales with digital alternatives, leading to substantial growth in China and Korea. He also highlights the adaptability of their agile supply chain in meeting the increased demand for digital offerings.

Mulberry’s performance in its domestic market, the UK, has faced adversity, with store sales plummeting by 68%. However, digital sales in the UK soared by 71%, resulting in an overall sales decline of 33%. Outside of Asia, store sales dropped by 71%, but digital sales witnessed a 48% increase, resulting in a total sales decline of 34%.

The company’s focus on the Asian market has proven particularly prosperous during the first half of the year. Sales in the Asia Pacific region surged by 28%, driven by a 20% rise in store sales and an astounding 89% spike in digital sales. Notably, Mulberry’s adoption of a global pricing strategy, guaranteeing consistent product prices worldwide, has played a pivotal role in its achievements in Asia. The company predicts that international revenue will comprise a more substantial portion of its overall revenue in the future.

A transformation is also evident in Mulberry’s marketing strategy, prioritizing meaningful engagement with its audience. During the lockdown period, the brand launched the “Take Root, Branch Out” campaign, enlisting the participation of global musicians, poets, and chefs to take over its social media platforms. In the Asian market, Mulberry implemented localized campaigns that resonated with the target audience. The recent launch of the Mini Iris handbag on Tmall, accompanied by an influencer campaign and live stream, exemplified the effectiveness of this approach.

Despite the formidable challenges confronting the fashion industry due to the pandemic, Mulberry remains unwavering in its optimism about the future. With a steadfast focus on sustainability, digital innovation, and expansion in Asia, the brand is well-equipped to navigate the ever-evolving landscape of luxury fashion.

Useful links:
1. Mulberry Official Website
2. Vogue Business: Mulberry Positive Results and Pandemic Optimism