LONDON – Sales at Mulberry fell 23 per cent to £ 115 million a year to March 27, but the UK handbag and accessory brand returned to profit during the pandemic, despite the fact that its physical stores were closed for much of the 12-month period.
The result was £ 4.6 million compared to last year’s loss of £ 47.9 million, reflecting growth in Asia-based and digital sales. The company also avoided write-downs during the period, which increased its profit margins and created a number of economies, including layoffs during the shutdown.
The underlying profit before tax was £ 5.9 million compared to a pre-tax loss of £ 14.2 million in the previous year.
Mulberry, marking its 50th anniversary, is back in revenue growth mode. The company said consolidated revenue for the period to date is 45 per cent ahead of last year, with retail sales up 30 per cent due to a strong recovery in the UK and continued growth in Asia, with Chinese retail sales up 46 per cent.
“I have been incredibly proud to lead Mulberry this year. In the last 12 months, our teams have faced enormous challenges from the global health crisis and have responded with resilience, determination and passion, ”said Thierry Andretta, the brand’s CEO.
“We have delivered robust financial performance and have made good strategic progress in our journey to build Mulberry as a leading sustainable global luxury brand,” he added.
Over the 12-month period, Mulberry’s international retail sales rose 4 per cent to £ 33.8 million compared to the previous year’s £ 32.4 million. Sales in Asia and the Pacific grew by 36 percent, driven by ongoing developments in the region, while Chinese retail sales increased 81 percent and South Korea’s retail sales increased by 36 percent.
Retail sales in the rest of the world fell by 27 percent.
At the operational level, digital sales generated 49 percent of total revenue compared to 24 percent in 2020, when customers migrated to online channels when stores closed. During the year, the company also established a European distribution facility to support online sales after Brexit.
During the 12-month period, the company also made progress in terms of its sustainability agenda. It launched its Made To Last Manifesto with a commitment to transform the company into “a regenerative and circular model that encompasses the entire supply chain, from field to wardrobe” by 2030.
It noted that 80 percent of the collection is now made from leather that comes from environmentally accredited tanneries.
This number will increase to 100 percent by the fall-winter 2022 season. Mulberry also makes bag repairs in Somerset, England, headquarters, restores more than 10,000 bags a year and has become an accredited Living Wage Employer, meaning it pays an hourly wage, which is higher than the government-mandated minimum wage.
The company also helped with COVID-19 by making PPE dresses and delivering meals to those in need.