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Mulberry’s Sales, Profits Climb in 2022, But China Dragging on Growth

LONDON – Mulberry Group’s moves to tighten operations, put a strong focus on sustainability and online sales are paying dividends, with profits more than quadrupling in fiscal 2022, and sales up nearly 33%.

Mulberry’s pandemic years were not easy: The British brand laid off staff, shut stores and factories, bid farewell to its designer Johnny Coca, and shelved its footwear and ready-to-wear collections as part of a major restructuring.

At the same time, the brand’s CEO Thierry Andretta fashioned a new strategy, putting the focus on high-end handbags made from green materials and accenting the online channel.

The result was a strong uptick in the top and bottom line: In the 53 weeks ended April 2, revenue rose nearly 32.5% to 152.4 million pounds, while profit more than quadrupled to 19.2 million pounds, including a one-off gain of 5.7 million pounds from the disposal of its Paris lease.

Mulberry’s shares were up 8.1% to 3.19 pounds in early morning trading on Wednesday.

On Wednesday, Andretta said the company has made great strides in its mission to be “the leading responsible British lifestyle brand, and a pioneer in sustainability.” He described the products as “made to last with the highest quality, lowest carbon materials in our U.K. factories.”

Andretta added that while the economic and geo-political outlook “remains uncertain, we are an iconic international brand with a clear strategy for future profitable, cash-generative growth.”

The company said it has witnessed a “strong recovery” post-COVID, with U.K. retail sales increasing 36% to 89.8 million pounds.

China retail sales rose 59%, while retail sales in South Korea rose 11%, contributing to an overall 28% increase in Asia-Pacific. International retail sales increased 20% to 40.4 million pounds in the 12 months.

During the period, five new stores opened in China, and four in South Korea, and Mulberry flagged its “ongoing growth and development” in the Asia Pacific region.

In the last 12 months, digital sales fell to 47.5 million pounds from 56.4 million pounds, reflecting customers’ decisions to return to physical stores. Overall, digital sales were up 31% compared to pre-COVID levels.

The board is proposing a final dividend of 3 pence per ordinary share, compared with zero dividend last year.

The company said the past year also saw improved margins due to a strategic focus on full-price sales and increased volume efficiencies. It added that the business and infrastructure has “responded well” to increased demand following the easing of COVID-19 restrictions.

As reported last year, Mulberry launched The Lowest Carbon collection, which is made from the world’s lowest-carbon leather, using a local and transparent supply chain. It is Mulberry’s first capsule collection of regenerative “farm to finished product,” and the fruit of the brand’s Made to Last manifesto.

During the year just ended, it also launched a resale program across all channels. The company said that 88% of the collection is now using leather sourced from environmentally accredited tanneries, and that figure will increase to 100% by end of the 2022 calendar year.

The company is also making further investment in the Mulberry Lifetime Service Centre at The Rookery, which is now restoring more than 10,000 bags a year.

Mulberry said that group revenue for the first 12 weeks of the new year is 5% ahead of 2022, supported by the wholesale business, which is up 29%.

The company added that retail and digital revenue is down 1%, “largely as a result of COVID-19 restrictions in mainland China, including the closure of the majority of stores and our Shanghai distribution center.”

This story was reported by WWD and originally appeared on WWD.com.

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