Mulberry H1 sales rise 18% as turnaround takes shape

(Sharecast News) - Mulberry reported a jump in first-half sales on Monday as it said its turnaround was taking shape, highlighting strong full-price sales growth and a solid performance in the US.

In the 26 weeks to 26 September, group sales rose 18% year-on-year, with sales in the UK 10% higher, while the US saw a 28% increase. Sales in Europe and Asia Pacific were up 23% and 5%, respectively, while franchise and wholesale revenue rose 52%.

The luxury handbag maker said the first half was supported by strong customer demand across both seasonal and core collections. New product introductions, including Raffia, Crochet, Stevie and Darley Camera Bag performed particularly well, it said, alongside continued demand for icons such as the Bayswater and Lily.

The company also said its recent performance benefited from heightened brand visibility following the Mulberry by Christopher Kane runway show at London Fashion Week. "This represented a significant milestone in the evolution of the brand, generating strong customer engagement," it said.

Mulberry said it had resisted discounting and generated strong full-price sales. Excluding markdown activity, promotional sales represented a 300 basis point lower proportion of sales than the prior year period.

The US business continued to perform well, benefiting from increased customer demand, positive digital performance, including the launch of Bloomingdale's Marketplace, and the expansion of the brand's wholesale presence.

Chief executive Andrea Baldo said: "We are very pleased with the progress made during H1. The strength of our performance reflects the work undertaken over the past year to refocus the group around product, brand and customer, while maintaining a disciplined approach to trading and cost management. The growth in full-price sales is particularly encouraging, demonstrating that our collections are resonating with customers across our key markets.

"There remains much more to achieve as part of our strategic plan, and we are operating in a challenging trading environment. However, we enter the second half with a strong product pipeline, increased brand desirability and a clear focus on delivering our strategy."

At 0920 BST, the shares were up 7.4% at 246p.

Susannah Streeter, chief investment strategist at Wealth Club, said:"Mulberry appears to have won back its place in the fashion pack, with its new bags proving a hit with stylish shoppers. The brand made a triumphant return to London Fashion Week with Christopher Kane's show, which has put it front and centre again with a fresh burst of creative energy. It's not resting on its seventies heritage reputation, with new styles like the Raffia, Crochet, Stevie and Darley Camera bags selling strongly.

"Mulberry is also becoming more disciplined about discounting, and that matters because luxury brands cannot rely on a constant stream of discounts without risking damage to their desirability. Promotional sales accounted for a smaller proportion of revenue than a year ago. Mulberry's challenge is to make its products feel worth paying full price for again, while persuading customers that the brand has a compelling identity beyond its best-known handbags.'"

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