Mulberry, the celebrated British luxury brand, has managed to maintain its strength amidst the global turbulence caused by the ongoing pandemic and other challenges. The company recently released its financial results for the 53-week period ending in April, and the figures are highly impressive. Mulberry has also expressed its determination to reopen its store in Paris once international tourism starts to recover.

According to the company, its group revenue for the first 12 weeks of the new financial year is 5% higher compared to last year. This growth is primarily driven by a significant increase in its wholesale business, which saw a remarkable growth rate of 29%. However, Mulberry did face certain setbacks in its omnichannel revenue, as it experienced a 1% decline in the first quarter. This decline can be attributed to the Covid-19 restrictions in mainland China, including the closure of stores and its distribution center in Shanghai.

While many markets may seem to have moved on from the global health crisis, the ongoing issues faced by Mulberry in China serve as a stark reminder that the pandemic is still posing challenges in certain regions. Additionally, Mulberry acknowledges the impact of other factors such as the geopolitical situation, inflationary pressures, and Brexit-related challenges, which are affecting the growth rate of the business.

Despite these challenges, Mulberry reported a remarkable 32% increase in group revenue, with a total of £152.4 million. This growth reflects a strong recovery after the Covid-19 pandemic. The company’s gross margin has also seen significant improvement, reaching 71.7%, up from 63.6% the previous year.

In the UK, retail sales surged by 36%, amounting to £89.8 million. The recovery was particularly strong once stores reopened, and this positive momentum continued throughout the year. During the peak trading period, sales exceeded the previous year’s figures, thanks to their made in the UK production supply chain, the relaunch of the Alexa family of products, and a successful festive marketing campaign. The company’s strategic decision to focus on full-price sales played a significant role in driving up the gross margin.

China, despite its current issues, posted a 59% increase in retail sales for Mulberry last year. South Korea also witnessed an 11% rise in retail sales, contributing to a 28% increase in Asia Pacific retail sales as a whole. However, specific details about Mulberry’s performance in Europe or the US were not provided. Overall, international retail sales increased by 20% to £40.4 million. Additionally, the ‘Rest of World’ region experienced a 3% growth in retail sales, while ROW wholesale/franchise sales skyrocketed by 44%.

Although Asia and the UK are currently the main focuses for Mulberry, the company recognizes the importance of other markets as well. Mulberry closed its Paris store during the past year but has plans to open a new store in the city once international tourism resumes. The location chosen will align with the company’s omnichannel approach and customer experience goals.

Digital sales experienced a decline during the year, which can be attributed to the shift back to physical retail as lockdowns eased. However, digital sales showed a promising increase of 31% compared to the pre-pandemic period, indicating the continued importance of online channels for Mulberry.

Furthermore, the company announced a profit before tax of £21.3 million. This figure includes a one-off profit of £5.7 million from the disposal of a lease in Paris. Even without this one-off profit, Mulberry’s profit before tax still surpassed the previous year’s figure of £4.6 million.

Mulberry attributes its improved global performance to its strategic focus on full-price sales, increased volume efficiencies, the strength of its digital operations, and the opening of new stores. In the past year, the company opened five new stores in China and four in South Korea, further supporting its growth in the Asia Pacific region. Mulberry also highlighted the successful launch of the new Softie bag family in February as a significant development.

CEO Thierry Andretta expressed satisfaction with the company’s progress, stating that Mulberry is dedicated to becoming the leading responsible British lifestyle brand and a sustainability pioneer. He credited the positive customer response to their products and the strategic decisions made over the past five years as key contributors to the company’s strong financial results. Andretta emphasized that while economic and geopolitical uncertainties persist, Mulberry is a renowned international brand with a clear strategy for future profitable and sustainable growth. The company remains confident in its ability to deliver sustainable returns for the benefit of all stakeholders.

Useful links:
1. Mulberry Official Website
2. BBC Article on Mulberry’s Financial Results