Mulberry adds Paris flagship store to overseas expansion

LONDON, England – British luxury fashion group Mulberry said it would open a new flagship store in Paris in the next 18 months, pushing ahead with an overseas expansion at the expense of first-half profit growth.

The Bayswater and Alexa handbags maker said on Thursday pretax profit for the six months to Sept 30 was 7.2 million pounds ($12 million), down from 10 million a year ago, as the firm invests to build a global profile.

Shares in the group were down 3.3 percent to 991 pence, giving it a market capitalisation of 590 million pounds.

Mulberry store in Berlin | Source: Mulberry

Mulberry said it was on track to open 15 new overseas stores in 2013/14, in high traffic, tourist locations particularly in North America and Asia, as it tries to take its brand more upmarket from its traditional position of “affordable luxury” and woo China’s more affluent luxury shoppers.

The group, which has also hiked prices of handbags and improved the quality of its materials, is targeting a mix of standalone stores and department store concessions, and said in 2014/15 it would open a flagship store on Paris’s Rue Saint-Honore street, a key tourist destination for China’s luxury shoppers.

First half revenue, over 80 percent of which currently comes from Europe, grew 2 percent to 78.1 million pounds, with retail revenue up 6 percent and wholesale sales down 5 percent, reflecting cautious ordering from European partners.

Retail sales, excluding online, grew 5 percent in the UK, as higher customer spend helped offset lower footfall levels, while international sales rose 29 percent reflecting an improvement in North America and growth in Europe.

The group said it was still searching for a replacement for its highly regarded Creative Director Emma Hill, who left in September.

Retail revenue for the nine weeks to Nov. 30 was up 3 percent, the firm added, with international revenue up 49 percent. The group said it was on course to hit its full-year profit targets.

Cautious wholesale trends were expected to continue for the for the full-year.

© Thomson Reuters 2017 All rights reserved.

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