Mulberry proves heritage is all the rage in Asia

Profits at the luxury handbag brand have more than tripled to £15.6m, thanks to sales in China.

by Emma Haslett
Last Updated: 14 Jun 2013
Business is clearly booming for Mulberry: the high-end handbag maker has reported profits have tripled since this time last year, from £4.7m to £15.6m. Total revenues also increased, albeit by a more modest 62%, to £72.3m, up from £44.7m. The company says it’s all down to Mulberry mania in Asia, where the burgeoning middle classes have come over all English Heritage. But it also warned that even China isn’t entirely immune to the debt crisis.

The beauty of Mulberry is that its handbags cost anywhere between £350-£3,500 (or more), which encapsulates a wide section of the population – from those who save up to buy themselves something a bit special, to the more affluent on a handbag-a-week habit. Mulberry’s ‘affordable luxury’ strategy pushed like-for-like retail sales up by 44%, while international revenues rose by 115%, to £29.4m.

In fact, wholesale shipments rose by a staggering 93% in the six months, pushed up by increased demands from abroad  – which hardly makes it surprising that the brand is planning to open another nine stores in the next six months (although it kept schtum as to where those will be). Add to that the fact that back in October, it signed a 10-year deal with Asian distributor Club 21 to sell its products in South East Asia, and Mulberry seems to be avoiding the downturn in spending rather nicely.

The company did have one cautionary note to add, though: apparently, sales growth has slowed in the last couple of months, with like-for-like sales rising by a mere 14% in the 10 weeks to 3 December. And although that’s the sort of growth many of its rivals would give up their leopard Evelina for, Mulberry warned that the ‘potential impact of the economic environment on consumers’ spending habits makes the future more challenging’. Which suggests that even luxury brands are battening down the hatches for the long winter ahead.

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