Luxury handbag firm sees 8% rise in sales after widening its customer base and adding lines of seasonal products.
Profits at the British handbag maker Mulberry have recovered after it cut prices to win back customers.
Mulberry’s efforts to become a more affordable luxury brand appear to be paying off, after a disastrous move upmarket in recent years. It now intends to open more factories in the UK as revenues rise.
Profits before tax rose to £6.2m in the year to 31 March, from £1.9m the previous year. Retail sales climbed 8% to £118.7m while wholesale revenues dipped slightly to £37.2m from £38.8m. Like-for-like sales were up 8% last year but growth has slowed in the 11 weeks to 11 June, to 4%.
The Somerset-based firm said it remained committed to its core £500 to £995 price bracket for its bags, and has brought the style and pricing of shoes and ready-to-wear collections into line with bags. It has plans for more seasonal products.
Mulberry said the first collection from its new creative director Johnny Coca, who was recruited from Céline, at London fashion week in February had been well received by the press and the company’s partners.
The firm has pushed through production efficiencies at its UK factories, which produce half of its handbags. As they are close to full capacity, there are plans to open further factories in Britain. “The brand’s British DNA is emphasised as a point of distinction,” it said.
Mulberry opened a new flagship store in Paris in the last year, replacing a smaller one, and closed three stores in the US. It plans to open fewer stores in coming years to focus on improving shops and its digital business.
Digital sales rose 19% to £21.4m last year, accounting for 14% of group sales, compared with 12% in 2015. About half of this comes from mobile phones and tablets.
“Mulberry has made significant progress during the last financial year with solid growth achieved in revenues and profit,” said Thierry Andretta, the chief executive.
“Our UK manufacturing base has remained a core strength and point of distinction. We have built a strong foundation for future growth as a result of the investment made in product design and development as well as our omni-channel infrastructure.”