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Profits at Mulberry Group plc shot up to $3.64 million, or 2 million pounds at current exchange, from $56,420, or 31,000 pounds, for the fiscal year ended March 31, propelled by sales of its no-logo, weathered-looking leather handbags.
The spike in profits was the initial phase in a turnaround that began in 2002, when new management replaced Mulberry founder Roger Saul in an effort to stem years of losses and develop a viable growth strategy.
"It's the first step in the right direction, and it's very encouraging," Lisa Montague, chief operating officer, said. "But we're checking ourselves at every step along the way and keeping our feet on the ground. The brand name is still bigger than the actual business."
The company said in a statement Thursday that sales for the fiscal year rose 19 percent to $55 million, or 30.1 million pounds, from $46 million, or 25.3 million pounds, because of a vigorous leather accessories business. Accessories are the brand's engine, and generate about 85 percent of group sales. Mulberry is looking to boost sales to about $91 million, or 50 million pounds, by 2009.
As part of its growth strategy, Mulberry has been expanding into the U.S. and the Far East, and has been consolidating its distribution networks in Europe. The U.S. is a major focus for Mulberry now, and the company has said it would like to boost sales from 10 percent to at least 20 percent of the total during the next few years.
Last fall, Mulberry launched exclusively at Bergdorf Goodman. Since then, it has begun to sell at stores including Barneys New York, Neiman Marcus, Fred Segal, Jeffrey and Intermix. Mulberry is to start selling at Saks Fifth Avenue in the fall. Montague said the company also was looking for retail space in Manhattan, and the plan is to open a stand-alone store by spring.
In August, Mulberry's fall ad campaign, shot by Paolo Roversi, will break in U.S. Vogue, and later in Tatler and the British editions of Vogue and Glamour.
Mulberry's momentum is building in the current fiscal year.