Mulberry profits hit by international expansion costs

British luxury giant sees profit dive 28% to £7.2 million

Mulberry’s plan to turn itself into a global luxury brand has hit profits, the company admitted today.

The London and Somerset-based company, which is famous for its handbags named after stars including Aexa Chung and Lana Del Rey, reported a 28 per cent tumble in first-half profit as its turnaround plan and international expansion hit the bottom line.

Bruno Guillon, Mulberry’s chief executive who joined the British company from French luxury brand Hermès last year, said: “It is important to not forget our project to transform this UK success story into a worldwide success.

“We are facing challenges but we are still growing and we are encouraged by our international growth and our margin improvement.”

The group has revealed plans to open a larger store on Rue Saint-Honoré in Paris as part of its strategy to target world cities with high-spending tourists.

It intends to open stores across Asia and the US and wants to attract new customers from as far afield and China and  South America.

Mulberry is due to open another 15 stores during the coming year.

Guillon added: “Chinese shoppers, for instance, need to see us in Asia but also see us in the right locations when they travel abroad.”

Half-year profit was down by 28 per cent to  £7.2 million, but comparable retail sales growth jumped by 4% to £49.5 million.

Shares dipped 1p to 1016.5p.

The company has issued two profit warnings during  the past 14 months and its shares have fallen by 30% in two years.

The brand is still searching for a new creative director to replace Emma Hill who left in the autumn and its February catwalk show at London Fashion Week has been cancelled. Guillon said: “We need to be patient to find the right person — the right mix of vision and talent. The catwalk show is a point of view about the brand and we cannot do this until we have a creative director.”

He said that a replacement would be announced in the next few months.

Mulberry has increased the number of its bags which cost more than £1000 and upped the amount of products made in the UK — the company opened a new factory in Somerset during the summer as part of its plan to turn itself into an established luxury brand.

Guillon said a year ago only 4% of bags bought were priced at more than £1000 while in the past year 36% of bags sold have been above that level.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA special investigation by Andy McSmith
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Sheridan Maine: Finance Analyst

Circa £45,000-£50,000 + benefits: Sheridan Maine: Are you a newly qualified ac...

Sheridan Maine: Financial Accountant

£150 - £190 Daily Rate: Sheridan Maine: One of London's leading water supplier...

Jemma Gent: Year End Accountant

£250-£300 Day Rate: Jemma Gent: Are you a qualified accountant with strong exp...

Christine McCleave: Accounts Assistant

£30,000 - £35,000 Annual: Christine McCleave: Are you looking for an exciting ...

Day In a Page

No postcode? No vote

Floating voters

How living on a houseboat meant I didn't officially 'exist'
Louis Theroux's affable Englishman routine begins to wear thin

By Reason of Insanity

Louis Theroux's affable Englishman routine begins to wear thin
Power dressing is back – but no shoulderpads!

Power dressing is back

But banish all thoughts of Eighties shoulderpads
Spanish stone-age cave paintings 'under threat' after being re-opened to the public

Spanish stone-age cave paintings in Altamira 'under threat'

Caves were re-opened to the public
'I was the bookies’ favourite to be first to leave the Cabinet'

Vince Cable interview

'I was the bookies’ favourite to be first to leave the Cabinet'
Election 2015: How many of the Government's coalition agreement promises have been kept?

Promises, promises

But how many coalition agreement pledges have been kept?
The Gaza fisherman who built his own reef - and was shot dead there by an Israeli gunboat

The death of a Gaza fisherman

He built his own reef, and was fatally shot there by an Israeli gunboat
Saudi Arabia's airstrikes in Yemen are fuelling the Gulf's fire

Saudi airstrikes are fuelling the Gulf's fire

Arab intervention in Yemen risks entrenching Sunni-Shia divide and handing a victory to Isis, says Patrick Cockburn
Zayn Malik's departure from One Direction shows the perils of fame in the age of social media

The only direction Zayn could go

We wince at the anguish of One Direction's fans, but Malik's departure shows the perils of fame in the age of social media
Young Magician of the Year 2015: Meet the schoolgirl from Newcastle who has her heart set on being the competition's first female winner

Spells like teen spirit

A 16-year-old from Newcastle has set her heart on being the first female to win Young Magician of the Year. Jonathan Owen meets her
Jonathan Anderson: If fashion is a cycle, this young man knows just how to ride it

If fashion is a cycle, this young man knows just how to ride it

British designer Jonathan Anderson is putting his stamp on venerable house Loewe
Number plates scheme could provide a licence to offend in the land of the free

Licence to offend in the land of the free

Cash-strapped states have hit on a way of making money out of drivers that may be in collision with the First Amendment, says Rupert Cornwell
From farm to fork: Meet the Cornish fishermen, vegetable-growers and butchers causing a stir in London's top restaurants

From farm to fork in Cornwall

One man is bringing together Cornwall's most accomplished growers, fishermen and butchers with London's best chefs to put the finest, freshest produce on the plates of some of the country’s best restaurants
Robert Parker interview: The world's top wine critic on tasting 10,000 bottles a year, absurd drinking notes and New World wannabes

Robert Parker interview

The world's top wine critic on tasting 10,000 bottles a year, absurd drinking notes and New World wannabes
Don't believe the stereotype - or should you?

Don't believe the stereotype - or should you?

We exaggerate regional traits and turn them into jokes - and those on the receiving end are in on it too, says DJ Taylor