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  • Industry-First Marketplace Research Reveals only 7% of Australian Shoppers Trust Temu on Product Quality, while Amazon leads for Convenience, Range, and Returns

    Industry-First Marketplace Research Reveals only 7% of Australian Shoppers Trust Temu on Product Quality, while Amazon leads for Convenience, Range, and Returns

    An industry-first study by global ecommerce accelerator, Pattern, has shown that despite their surging popularity, Australian consumers hold negative views on the quality of the products sold on emerging marketplaces Temu and Shein.

    The major Australian marketplace shopper study uncovered Australian consumers’ perceptions of the seven largest marketplace platforms: Amazon, eBay, Catch, Kogan, Temu, MyDeal, and Shein.

    Temu was ranked as the lowest marketplace in perceived product quality at only 7%, followed by Shein, with just 8% of shoppers expressing trust in its product quality. This contrasts with a majority of shoppers saying that they trusted the quality of the products sold on Amazon.

    “Temu and Shein have burst onto the Australian ecommerce landscape, attracting large numbers of younger shoppers. However, these platforms still have to play a lot of catch-up to win over Australian consumers, who didn’t rate them highly for product quality, returns, and convenience,” said Merline McGregor, General Manager of Pattern Australia.

    “With a transparent product rating and review system built into its platform that educates and builds shopper trust, Amazon has become the most trusted marketplace in Australia in relation to the quality of products it sells. This is an area where Amazon leads the sector at 58%, with eBay trailing at 39%, followed by Catch (25%), Kogan (19%) and MyDeal (11%).”

    Marketplaces attract shoppers as cost-of-living pressures bite

    As cost-of-living pressures rise, Australian consumers are increasingly turning to marketplaces to research, compare, and purchase. A large majority of Australians shopped on a marketplace in 2023, with a staggering 94% planning to buy from platforms like Amazon, Catch, and eBay over the coming year.

    “With strained household budgets, marketplaces are attracting an increasing number of shoppers with their easy-to-use price comparison functionalities and sales events. With its globally recognised Prime Day event gaining popularity in Australia, Amazon has become the leading marketplace for value-for-money purchases, attracting 48% shoppers, followed by eBay at 41% and Catch at 27%,” said McGregor.

    Not only are marketplaces attracting higher volumes of shoppers, but they are more likely to secure high income shoppers in 2024. Today, over 80% of $200K earning households shop on Amazon. Even newer marketplaces like Shein attract high income consumers, with 34% of those in the $160-$199k household income bracket buying from the platform in the past 12 months.

    Amazon wins for convenience and returns

    Amazon outperforms all other marketplaces in relation to ease-of-use shopping, with 56% of consumers highlighting it was the most convenient platform to buy from, compared with eBay (46%) and Catch (23%).

    This can be attributed to Amazon’s Prime membership benefits, where shoppers get free, fast shipping and the platform’s advanced search and recommendation algorithms that personalise the shopping experience.

    Given the sophisticated supply chain infrastructure it has established in Australia, 49% of shoppers also said Amazon has the most reliable returns process – significantly more compared to any other single marketplace.

    Brands need to be present on platforms with biggest product ranges

    Just over 60% of Australian shoppers believe Amazon has the widest product range, followed by eBay at 52%. All other platforms lagged – Catch, 20%, Temu, 17%, Kogan 14%, Shein, 11% and MyDeal 8%. Offering the most product variety and options also buys marketplaces the highest web clicks, with Amazon averaging 75.2 million monthly site visits and eBay 50.9 million.

    “It’s no surprise there’s a direct correlation between marketplaces perceived to have the best product ranges and those platforms, like Amazon, that attract the highest volumes of web traffic. Brands need to be present where their shoppers are. While the larger marketplaces may have more competition, they also have the biggest audiences of potential shoppers to target,” concluded McGregor.

    For more information and to download the full report please click here: ‘Australian Marketplace Consumer Trends Report – 2024’ 

    Research Methodology

    Pattern worked with OnePoll to survey 1,000 Australian consumers. Responses were collected online, and the survey was restricted to adults who had shopped online in the previous 12 months ensuring there was a representative sample of age, gender and location achieved.

    About Pattern Inc

    Pattern is the category leader in global ecommerce and marketplace acceleration. Since 2013, Pattern has profitably grown to more than 1,100 employees operating from 22 global locations – including Melbourne, Sydney and the Gold Coast – to help leading brands achieve accelerated growth on D2C websites and global marketplaces. As well as being one of the largest Amazon sellers in the world, we are also present on Tmall, JD.com, eBay and other marketplaces. ​​We act as the authorised Amazon seller to more than ​2​00 brands​ globally​, buying their stock to sell on the marketplace and taking care of every aspect of their Amazon presence. In 2018, Pattern acquired Practicology, a global digital consultancy and agency with a presence and strong client base in Australia. For more information, visit https://au.pattern.com/ .

    Media Contact

    Corinne Nolte

    Mulberry Marketing Communications

    [email protected]

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  • Mulberry to cull global workforce

    Mulberry to cull global workforce

    Mulberry is culling about 25 percent of its staff worldwide as it right-sizes in the wake of the Covid-19 pandemic. In a statement, the UK-based fashion brand said that while it has been able to reopen most of its stores in China and South Korea – and some in Europe and Canada – the majority remain closed.

    “We reacted swiftly to manage the impact of Covid-19 and continue to execute a well-developed plan to manage capital, reduce costs and maintain a robust liquidity position,” said CEO Thierry Andretta.

    However, despite the good performance of Mulberry’s sector-leading digital and omnichannel presence, and a global network of concessions, the shutting of physical stores has had – and will continue to have – a marked effect on the business.

    A consultation process on proposals to reduce employee numbers across the global business has begun.

    “This has been an incredibly difficult decision for us to make, but it is necessary for us to respond to these challenging market conditions, protect the maximum number of jobs possible and safeguard the future of the business. We remain confident in the strength of the Mulberry brand and our strategy over the long-term,” said Andretta.

    While digital channels have continued to trade without interruption throughout the pandemic and their sales were good, they could not fully offset the decrease in demand experienced from store closures.

    In the UK, Mulberry will begin to phase the reopening of stores from June 15, but with additional safety standards and procedures put in place to ensure they operate safely.

    The brand has also taken steps to manage its inventory levels in line with anticipated lesser demand.

    “Given the uncertainty as to the impact and duration of Covid-19 on the company and the wider economy and the consequential effect on demand, we expect the recovery in our overall sales levels over the medium term to be gradual. Even once stores reopen, social-distancing measures, reduced tourist and footfall levels will continue to impact our revenue,” the company said.

    Cutting staff levels would help Mulberry to manage its operations and cost base to ensure the company is the correct size and structure to reflect market conditions, said Andretta.

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  • Asian expansion contributes to loss for Mulberry

    Asian expansion contributes to loss for Mulberry

    Expansion into Asia has weighed on British luxury bag label Mulberry’s bottom line, but the company is confident the foray will bear fruit.

    Mulberry reported a pre-tax loss of £5 million in the year to March 30, a sharp contrast to a £6.9 million pre-tax profit the previous year.

    The other major contributor to the loss was the collapse of British department store House of Fraser which cost it £2.1 million and worsening the impact of a “challenging” UK domestic market. Sales fell 2 per cent to £166.3 million.

    During the year, Mulberry opened new business subsidiaries in Japan and South Korea along with new stores in New York and Dubai as it focuses on international markets for sustained future growth. Revenue from overseas rose 7 per cent for the year, compensating in part for a 6 per cent drop in domestic sales. Online sales rose 27 per cent

    “The group has delivered results in line with expectations and is making good progress in advancing its international strategy and direct to customer model whilst managing a challenging UK market,” said CEO Thierry Andretta.

    “Looking ahead, we anticipate that international and digital sales will continue to grow whilst UK retail trading conditions are expected to remain uncertain. The group plans to invest further in its new Asian entities during this development phase, enhance its global digital platform and optimise the UK network,” he said.

    Sales in the 11 weeks to June 15 were up 13 per cent.

    Chloe Collins, senior retail analyst at GlobalData, said Mulberry needs to seek new and inspiring ways to attract new customers via increased social media and marketing campaigns.’

    She said Mulberry’s expansion of its lifestyle-product offer – it launched its first eyewear range last year – and its plans to increase the depth in its range of trainers are a wise move to capitalise on the trend for athleisure and competing with the likes of Isabel Marant and Golden Goose.

    “However, it must be careful that this does not distract design focus from its core handbags offer, where developments and upgrades are still necessary to maintain shopper appeal.”

    She said teaming up with fast-growing technology platform Farfetch for a new digital concession in April, will help Mulberry increase its reach and bolster sales, both in the UK and internationally.

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  • Mulberry Launches on Alibaba Group’s Tmall Luxury Pavilion

    Mulberry Launches on Alibaba Group’s Tmall Luxury Pavilion

    British luxury brand Mulberry is excited to announce the launch of its brand f lagship on Tmall’s Luxury Pavilion – Alibaba Group’s dedicated platform for premium brands. This launch is an important step in Mulberry’s strategy to develop the brand presence in China, providing access to a substantial local customer base through the world’s second largest online retailer.

    Following the creation of new owned subsidiaries in China, Hong Kong, Taiwan, Japan and Korea during the last two years, Mulberry is now focusing on developing its omni-channel and digital distribution in the region.

    Launched in 2017, the Tmall Luxury Pavilion creates a new type of e-commerce which looks to replicate the same feeling of brand exclusivity and personalised shopping experience that luxury consumers have become accustomed to having when shopping in physical stores.

    The Mulberry Tmall f lagship store features a wide selection of the brand’s iconic leather goods, luggage, soft accessories, footwear and jewellery.

    The official launch week coincided with Lunar New Year and saw Mulberry offer an exclusive Year of the Pig capsule collection through the Tmall Luxury Pavilion. The range featured some of the brand’s most popular bag silhouettes rendered in Scarlet Croc Print leather and accessorised with a bespoke bag scarf designed by Chinese artist Li Rui.

    “Launching the Mulberry flagship on Tmall’s Luxury Pavilion is an important step in growing our Chinese customer base and further developing the brand in key international markets.”- Thierry Andretta, Mulberry CEO.

    We are really excited to have an iconic British brand like Mulberry joining the Luxury Pavilion stable,” said Jessica Liu, president of Tmall Fashion and Luxury. “Since its launch in 2017, Luxury Pavilion has been committed to provide consumers in China with the finest and curated selection of premium products from the best luxury brands in the world, designing at the same time a unique

    and immersive shopping experience for them. Our partnership with Mulberry represents an important enrichment of our offering and we look forward to working with them while they expand in China”.

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  • UK Mulberry sales drop rescued by Asia growth

    UK Mulberry sales drop rescued by Asia growth

    Strong Asia performances helped mitigate falling UK Mulberry sales in the latest half year. While the UK fashion house’s total revenue was down 8 per cent to £68.3 million, international sales were up 13 per cent. Within that figure, new entities in South Korea and Japan saw the company’s retail chain expand to 29 stores, compared with just one a year earlier.

    And new digital partnerships in China with Toplife, Secoo and VIP.com also boosted sales. Mulberry says further such reseller agreements are planned.

    The core UK business was profitable, but the company was affected by the administration of House of Fraser and “soft retail conditions” in its home market. Overall UK retail sales were down 11 per cent during the six months.

    Globally, e-commerce sales rose 5 per cent and now representing 17 per cent of Mulberry sales, up from 14 per cent the same period last year.

    The company posted an underlying loss before tax of £3.6 million, compared with a £600,000 loss the previous year.

    However, after one-off costs for House of Fraser (£2.1 million) and the South Korea launch (£2.5 million), the company reported a loss pre-tax loss of £8.2 million.

    CEO Thierry Andretta said the company is delivering on a strategy to develop Mulberry as a global luxury brand and the new South Korean and Japan businesses, along with the creation of the China digital partnerships were big steps on that pathway.

    “We are confident that our focus on international growth is the correct strategy to develop Mulberry.”

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  • Mulberry thinks big in South Korea with Seoul show

    Mulberry thinks big in South Korea with Seoul show

    Mulberry has set its sights firmly on Seoul and South Korea. After Tommy Hilfiger’s show in Shanghai, it is now the turn of the British luxury leather goods label to tread the catwalks in Asia.

    For four days, Mulberry will be staging a series of events in the South Korean capital, for its ‘Mulberry x Seoul’ operation. Top of the bill is a show scheduled on September 6 at 8 p.m. at the K Museum of Contemporary Art, which is broadcast live on Mulberry’s website and social media accounts.

    The show introduced the label’s ‘Eccentric Sensibility’ Autumn/Winter 2018-19 collection, with which creative director Johnny Coca seeks to explore “the mischievous, eccentric facet of British style.”

    Mulberry is keen for Koreans to discover its own brand of British eccentricity, “the by-product of a juxtaposition of historical and visual references.” The show will be followed by a gala evening organised by artist collective Studio Concrete and by renowned Seoul club Trunk, notably featuring star Korean DJ Peggy Gou.

    The public also enjoyed a comprehensive Mulberry experience, with events including British-themed cocktail parties, a selfie studio and films. For the occasion, the Museum of Contemporary Art will host a Mulberry pop-up store, with the chance to win gifts and, above all, one of the exclusive Small Harlow handbags from the latest collection – a limited edition of the model will be available in Korea for two weeks. In parallel, and until September 21, Seoul’s two 10 Corso Como concept stores will showcase a selection of Mulberry items from the new collection.

    “At a time when we are focusing on international expansion, this event will boost our distribution network in South Korea, which is already robust. We want to realise the brand’s potential in this crucial market, and to address more directly a generation that is young, curious and keen on digital tools,” said the CEO of Mulberry, Thierry Andretta, in a press release.

    Mulberry recently set up the Mulberry Korea joint-venture company with its long-standing South Korean partner SHK Holdings. The British label has a 60% stake in the company, which will manage its business in the country.

    The two partners are planning investments worth €5.22 million. Mulberry currently operates 18 retail outlets in South Korea, including concessions, outlet and duty-free stores and an e-tail site.

    In recent years, the luxury leather goods brand strengthened its presence in Asia by creating other joint-venture companies, in China, Hong Kong, Taiwan and Japan. In the 2017-18 financial year, which closed on March 31, Mulberry generated a revenue of €192.61 million, up 1 percent, while its retail sales rose 3 percent, reaching €150 million.

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  • Mulberry Group looking for a JV Parter in Korea

    Mulberry Group looking for a JV Parter in Korea

    Despite a profit decline for its latest year, UK luxury leathergoods company Mulberry Group plans to form a JV to develop its business in South Korea.

    It says it has signed an agreement with SHK Holdings to form Mulberry (Korea) Co. It will own 60 per cent of the new entity and the two companies will invest £4.6 million (US$6.1 million) to buy assets and to develop the business in South Korea.

    Mulberry last year had plans to launch an equal-share JV with another company as well as plans to launch into Hong Kong.

    Meanwhile, for the financial year to March 31, Mulberry made a profit of £6.9 million, down from £7.5 million the year earlier.

    Revenue rose 1 per cent to £169.7 million, it said. Retail sales grew 3 per cent, with UK sales broadly flat and international sales up 20 per cent. Digital sales grew 14 per cent, making up to 17 per cent of group revenue, the company said.

    For current trading, Mulberry says retail like-for-like sales fell 7 per cent in the 10 weeks to June 2 with international sales up 1 per cent. However, UK sales were down 9 per cent because of lower footfall.

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  • Mulberry FY profit falls; to form South Korea JV

    Mulberry FY profit falls; to form South Korea JV

    Mulberry Group PLC (MUL.LN) said Wednesday that fiscal 2018 pretax profit declined 8% and that it will form a new majority-owned joint venture to develop its business in South Korea.

    The luxury leather-goods company said it has signed an agreement with SHK Holdings Ltd. to form a new entity called Mulberry (Korea) Co.

    Mulberry said it will own 60% of the new entity and the two companies will invest 4.6 million pounds ($6.1 million) to buy assets and to develop the business in South Korea. Mulberry expects to incur around GBP3 million of costs in the current financial year for the joint venture.

    Meanwhile, for the financial year ended March 31, Mulberry said it made a profit of GBP6.9 million compared with GBP7.5 million the year earlier.

    Revenue rose 1% to GBP169.7 million from GBP168.1 million, it said. Retail sales grew 3%, with U.K sales broadly flat and international sales up 20%. Digital sales grew 14% making up to 17% of group revenue, the company said.

    For current trading, Mulberry said retail like-for-like sales fell 7% in the 10 weeks to June 2 with international sales up 1%. However, U.K. sales were down 9% due to lower footfall in the period, it said.

    London-listed Mulberry maintained the dividend at 5 pence a share.

    “Following another period of cash generation, our balance sheet is strong. Although the U.K. market remains challenging, we will continue to invest in our strategy to develop Mulberry into a global luxury brand to deliver increased shareholder value,” Mulberry Chief Executive Thierry Andretta said.

  • Mulberry looks into Australia

    Mulberry looks into Australia

    Luxury leather goods retailer Mulberry has flagged Australia as one of its next international targets and has inked a deal with Luxury Retail Group to help it oversee its local expansion.

    Three stores have already been leased, including a 244-metre squared corner site in Melbourne’s renowned Emporium centre, which will open in July and serve as a design concept.

    It will be the second run at the Australian market for the British business, which bought back its distribution rights from a previous partner last year and has been trading out of a single store on Sydney’s Pitt Street since 2010.

    Under its exclusive distribution deal with LRG that store will be closed, and new stores will be opened in Melbourne’s Chadstone shopping centre and Sydney’s Queen Victoria Building.

    “We are incredibly excited by this new partnership,” said LRG managing director, Nelson Mair. “And

    look forward to achieving strong growth results and new customer reach within the market.”

    Mair had previously signaled that LRG was looking for a new luxe brand to work with Down Under after selling back local distribution rights to Furla and Follie Follie Group in Australia last year, the business is also distributing Kering Group’s Balenciaga brand in Australia and owns online footwear retailer Sneakerboy.

    Mulberry, headquartered and publicly listed in the UK, already sells its range of menswear, womenswear, accessories and footwear in 24 other markets around the world, including China, South Korea, The United States and Japan.

    “I am pleased to announce our partnership with LRG in Australia. We look forward to seeing significant growth and opportunity for Mulberry in this market,” Mulberry chief executive Thierry Andretta said of the expansion in a statement.

    Mulberry’s long-term strategy is to define itself as a global luxe brand, but the company has fallen under a cloud in recent years, suffering an 80 per cent decline in profits since 2012 amid disruption within the global retail market.

    Andretta, who was appointed in 2015, has been working to improve the fortunes of the business by moving to a direct to customer model and last year oversaw the company’s first revenue increase in several years, increasing sales by 7.7 per cent to £168.1 million (AUD$308m).

    LRG said that additional store leases are already being considered for the brand in Australia, with the initial slate of stores to serve as an indication of how local customers respond to the business.

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  • Mulberry Group first store to launch in Hong Kong

    Mulberry Group first store to launch in Hong Kong

    UK-headquartered luxury fashion retailer Mulberry Group plans to launch in Hong Kong.

    Announcing its first half-year results, the brand revealed plans – but no details – to expand in both Hong Kong and Mainland China through an omnichannel strategy. Other, unidentified global markets are on its radar as well.

    The news follows the success of its recent expansion into Japan which helped strengthen the international performance in the six months to September 30.

    In Japan, Mulberry Group signed a 50-50 joint venture agreement in July with licensing partner Onward Global Fashion (OGF). An initial presence of four stores in key locations, including Ginza, has already been expanded with a fifth store opening.

    Total first-half revenue for the company was virtually flat at £74.6 million (US$99.8 million) compared to £74.5 million a year ago. Sales through its retail channel were up 2 per cent to £56.6 million, but comparable sales eased 1 per cent. Gross margin increased 248 points (up £1.9 million).

    While UK sales were flat, international sales grew 8 per cent to £11.3 million. Global digital sales rose 3 per cent to £10.7 million, accounting for 14 per cent of group revenue.

    “We are delivering on our strategy to grow Mulberry as a global luxury brand,” says CEO Thierry Andretta.

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  • Mulberry links with licensee Onward for Japan joint venture

    Mulberry links with licensee Onward for Japan joint venture

    Luxury fashion and accessories brand Mulberry has added another joint venture (JV) in Asia with news that it has signed an agreement with existing license partner Onward Global Fashion to form a 50:50 JV company to operate its business in Japan.

    UK-based Mulberry said the new company will benefit from its digital and brand building capabilities coupled with Onward’s experience in distributing luxury brands across the Japanese market.

    “The joint venture will advance the group’s strategy of directly participating in key international luxury markets while continuing to refine its positioning in the UK,” it said on Friday.

    The new company will be called Mulberry Japan Co Limited and will have its HQ in Tokyo. It will develop the Group’s retail, digital, omnichannel and wholesale business in the Japanese market and is expected to be “profit-neutral” for Mulberry during the initial two-year development phase.

    Mulberry and Onward will be equal partners, each owning 50% of the share capital of the new company. Between them they will invest ¥400 million (£2.8 million) to provide funds to develop the distribution network and build the brand’s presence in the country.

    Mulberry’s CEO Thierry Andretta said the luxury firm sees Japan as a “significant growth opportunity” and that in Onward it has “a partner which has extensive luxury goods experience and a robust infrastructure which will enable us to advance our international retail and omnichannel strategy in this key market.”

    So how will it all work?  Mulberry Japan will manage all retail, digital fulfilment and wholesale distribution for the Japanese market.  A general manager has been appointed to build a local team, based in the Tokyo head office with the firm expected to be up and running later this year.

    The distribution platform currently consists of a new Mulberry store in Tokyo Ginza G6, two concessions (one in Tokyo, one in Osaka), wholesale and the Group’s mulberry.com site.

    The Japan deal comes as Mulberry makes growth in Asia a priority. Earlier this year it set up Mulberry (Asia) Limited as a JV with Challice Limited to operate the group’s business in Hong Kong, China and Taiwan. That launch also came along with “significant” marketing investment in North Asia. In addition to local marketing initiatives, Mulberry plans to invest around £3 million in additional support over the next two years.

  • Asia is turbo boosting luxury bag maker Mulberry’s profits

    Asia is turbo boosting luxury bag maker Mulberry’s profits

    Luxury fashion brand Mulberry saw profits jump due to expansion in Asia, a rise in digital sales, and increased efficiencies, the group reported on Wednesday.

    Profit before tax was up 21% at the end March 2017, compared to a year previously. Sales from digital grew by 19%, and now make up 15% of the Group’s revenue. Total revenue is up 8% to £168.1 million, compared to £155.9 million in 2016.

    The brand also created a new entity, Mulberry Asia, to manage its business in China, Hong Kong and Taiwan, with stores opening in Shanghai and Hong Kong earlier in the year.

    “During the year we have made good progress. Our sales and profits are growing, enhancing our strong cash position. We have advanced our international growth strategy with a new partnership in Asia and the continued expansion of our omni-channel offer in key markets,” said CEO Thierry Andretta.

    The rise in profit comes despite fears, over the past two years, that luxury brands expanding in Asian markets might suffer from slowing growth in China. The group also seems to have recovered from having slipped into the red in December 2016: despite upfront costs caused by expanding in Asia, Mulberry reported it now has no debt. Despite the good news, Mulberry’s shares dropped 2% as of 09:05 a.m. (BST) on June 14.

    In the UK, two stores (Covent Garden and Bicester) were relocated, while two closed in North America (in New York and Washington), to focus instead on digital sales.

    “Looking ahead, we will continue to invest in advancing our international development and increasing Mulberry’s relevance to our customers’ rapidly evolving lifestyle,” said Andretta.

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  • Mulberry Asia launches with Challice as partner

    Mulberry Asia launches with Challice as partner

    English luxury brand Mulberry Group has launched Mulberry Asia in partnership with Challice, which will run its business in China, Hong Kong and Taiwan.

    Mulberry Asia will start trading in Hong Kong from April 3, with a subsidiary in China and a branch office in Taiwan expected to follow this year.

    Mulberry owns 60 per cent of the share capital of Mulberry Asia, with Challice holding the balance.

    There will initially be four stores: two in China, one in Hong Kong and one in Taiwan. The new JV will also manage regional wholesale sales. A Chinese-language Mulberry.com site will be launched along with a regional omni-channel platform, with the partners planning “significant” marketing investment in north Asia.

    Mulberry plans to invest about £3 million (US$3.7 million) in additional support over the next two years to build brand awareness in the region.

    In the near term, a store will be opened in Shanghai, while stores in Beijing and Hong Kong will be relocated.

    Founded in the UK in 1971, Mulberry is best known for its leather goods.

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  • Mulberry expansion plan in Asia

    Mulberry expansion plan in Asia

    Mulberry Asia, a new joint venture between the British fashion brand and Challice Limited, has announced plans to open four stores in Hong Kong, China and Taiwan and a Chinese language eCommerce site.

    The move was announced along with the company’s half year results which saw sales rise 10 per cent, but the company posting a loss due to investments, mainly in a new collection.

    Mulberry will cease its current distribution agreement with Club 21, although its new partner Challice shares the same ultimate ownership.

    Mulberry Asia will locate its head office in Hong Kong from where it will manage all retail, digital fulfillment and wholesale distribution for the region. Challice will hold a stake of about 40 per cent in the new business.

    The company says it expects to post losses for two years during its establishment phase, moving into profit in year three.

    Mulberry CEO Thierry Andretta said the new venture would progress the group’s international strategy of developing its retail and omnichannel model “in a key luxury market where we see significant growth opportunity”.

    Subject to a number of practical issues, including obtaining Chinese trading licenses, Mulberry Asia is expected to be operational from Spring 2017.

    Analyst said Mulberry Asia was an impressive direction to take.

    “It will allow the brand to better serve its customers in North Asia and provide it with a solid foundation to further grow its business in this region. However, investment in product design and creativeness must continue so that Mulberry stands out in the increasingly difficult and crowded Asian market.”

    Footfall rises

    Meanwhile, while investment to create the new collection has had a negative impact on gross margin, down 2.4 percentage points to 59.1 per cent, it has successfully driven footfall into stores and turned its wholesale business around. Revenue was up 10 per cent in the half year, compared with an 11 per cent decline in the same period last year.

    Strachan says modern totes and bucket bags have improved the desirability of Mulberry’s offer, appealing to a new, younger shopper demanding more on-trend innovative pieces but with the craftsmanship and quality credentials that the brand continues to leverage and showcase.

    “Mulberry has achieved impressive UK like-for-like growth, despite tough 2015/16 comparatives, benefiting from international visitors taking advantage of the weak pound and high demand for British heritage brands. The opening of its new Covent Garden store was fortunate timing to showcase its new collections to this influx of lucrative shoppers,” said Strachan.

    “Conversely, the devaluation of the pound has hit the sales performance in some of its tourism-driven stores in Europe and the US, and has led to higher UK production costs and running costs of overseas subsidiaries.”

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  • Jimmy Choo sales outperform Burberry and Mulberry

    Jimmy Choo sales outperform Burberry and Mulberry

    British footwear brand Jimmy Choo has outperformed luxury peers such as Burberry and Mulberry to post a strong set of growth figures for the first half of 2016.

    While competitors struggle with declining luxury demand in Asian markets, Jimmy Choo has bucked the trend and reported an impressive 22.1 per cent growth in Asia (ex-Japan) with China leading the way with double digit like-for-like growth; proving its measured approach to store expansion and brand building is successful without over exposing the brand.

    Europe, Middle East and Asia revenue grew by 12.2 per cent – commendable given it is one of Jimmy Choo’s most mature markets – with the UK performing well as domestic demand remained robust, supported by a renovated store portfolio.

    The recent uptick in luxury goods demand in the UK, as international travellers take advantage of the weaker pound, will further benefit Jimmy Choo’s UK performance in the second half.  The Americas, however, is proving a tougher nut to crack though, as sales declined 3.4 per cent; affected no doubt by the continuing volatility in the US department store market which has led wholesale orders to decline.

    Creative director Sandra Choi has led a strong half year of product design, building upon Jimmy Choo’s British identity to produce ranges which continue to resonate with consumers across the globe. The brand’s recent decision to focus on expanding men’s footwear is proving fruitful, as it’s now its fastest growing category, representing 8 per cent of total revenue. That will continue to grow as the brand opens dual gender stores and invests in the product and marketing of men’s collections.

    Globally, Jimmy Choo sales grew 9.2 per cent at reported currency and 3.8 per cent at constant currency. Improved gross margins and cost controls drove adjusted EBITDA growth of 13.7 per cent. Reported operating profit rose 42.6 per cent to £25.3 million.

    Jimmy Choo is in prime position to continue its growth momentum with its multi-pronged focus on eCommerce (bolstered by growing social media engagement and a robust distribution network) and conversion of retail outlets to new concept stores – all supported by a stellar product offer that is effective in both design and range.

    *Nivindya Sharma

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