Growing Mulberry: Net Climbs for 'Insider' Brand

Mulberry, the British accessories and ready-to-wear brand, saw profits blossom to $3.6 million for the year, propelled by sales of leather bags.

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The statement said autumn wholesale orders were 80 percent ahead of the previous year, although a lower growth rate is expected for spring sales because of difficult comparisons with the previous year. The company said retail sales for the nine weeks until June 4 increased 47 percent. However, Mulberry pointed out that growth rates were expected to decline in the second half due, once again, to tough comparisons with the previous year.

Sales are split evenly between wholesale and retail channels. Europe, including the U.K., generates about 75 percent of all business, followed by North America and the Far East, each with 10 percent. The rest of the world accounts for the remaining 5 percent.

During the past year, Mulberry opened a stand-alone unit in Notting Hill, bringing the total number of U.K. stores to five. Mulberry also opened stores at Heathrow Airport's terminal one and terminal four, and concessions at the U.K. department store House of Fraser. The brand has nine doors in continental Europe and Scandinavia.

In the Far East, the company opened stand-alone stores in Hong Kong, Bangkok and Kuala Lumpur in partnership with Club 21, which belongs to Mulberry's majority shareholders, Christina Ong and Ong Beng Seng. Mulberry also has formed a joint-venture distribution company with the Ongs, Mulberry USA LLC, for its U.S. wholesale clients.

The Ongs, Singapore-based hotel and fashion entrepreneurs, own 52 percent of Mulberry, and the remaining shares are quoted on London's AIM stock exchange. The Ongs, who provided the initial financial muscle for the turnaround, injected almost $2 billion into the company in 2000. They also replaced Saul, with whom they had a bitter boardroom clash in 2002. Later that year, Saul, who founded Mulberry in 1971, was replaced by Godfrey Davis as chairman and chief executive officer.

Robert Burke, vice president and senior fashion director of Bergdorf's, which also carries Mulberry's rtw line exclusively in the U.S. market, said the collections were a hit from the start. "The collection came on very strong,'' he said. "The bags were an immediate success — and they've maintained their momentum."

Burke attributed part of Mulberry's success to "pent-up demand" before the bags even hit the U.S. market. Until now, Mulberry hadn't focused on advertising, but relied instead on celebrities to relay the message. Kate Moss, Beyonce Knowles and Kate Winslet all have carried the Bayswater, a slouchy satchel, while Madonna, Julia Roberts and Gisele Bundchen all have the Roxanne, which has buckled front pockets.
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