Mulberry is bagging big sales of iconic carry
Yesterday British luxury goods group Mulberry reported 21 per cent sales growth in the last ten weeks, showing demand for bags with its discreet tree logo remains strong.
Mulberry’s chairman and chief executive, Godfrey Davis, admitted extravagance is now unfashionable. But he claimed the “understated British style” of his handbags remained in demand with cautious but still fashion conscious shoppers.
But, according to the group’s interim results yesterday, sales at Mulberry have been boosted by the Mitzy range, which Davis said became instant bestsellers. These retail for 300 to 700.
Mulberry has two shops in Scotland and in its outlet on Multrees Walk, Edinburgh, the biggest sellers are the cut price Mitzy range and the “iconic” Bayswater.
UK retail sales for the first ten weeks of its new financial year were Tommy Hilfiger Outlet up 26 per cent. On a like for like basis they were up an impressive 21 per cent. Sales were also boosted by tourists taking advantage of weak sterling.
Profits of 4.2 million in the year to 31 March beat expectations but were down from 5.2m the previous year. Last year the group opened shops in Leeds and London. The group is free of debt and plans to continue to pursue its expansion globally.
According to yesterday’s figures, the group overcame a September 2008 sales slump to have a good two weeks before Christmas, when sales “returned to healthy growth”. And while they have successfully introduced a line of cheaper bags, they did not have to resort to pre Christmas discounting.
Nevertheless, Mulberry expects wholesale orders to be down 15 per cent for the autumn/winter season and down 4 per cent for spring/summer 2010 as retailers cut orders to cope with lower demand.
Group sales rose 14 per cent to 58.6m in the year ended Ma Tommy Hilfiger Outlet rch 31, including a 15 per cent rise in whole Tommy Hilfiger Outlet sale sales, a 15 per cent rise in UK retail sales and a 2 per cent rise in UK like for like sales.
The jump in recent UK like for like sales was led by a 45 per cent surge in demand at discount factory outlets, which sell discontinued ranges at lower prices. Sales at full price stores were up 11 per cent.
Mulberry said stock levels had almost doubled to 14.8m because of lower than expected second half sale when production was planned before the downturn. But Mulberry has adjusted purchasing with an aim to reducing stocks to normal levels by the end of March 2010.
Shares in Mulberry were up 4.6 per cent to 68p. Analysts at its brokers Altium Securities maintained a “buy” recommendation and said “we think the shares are too cheap”.
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