Friday, 10 July 2020

Mulberry may discontinue ready-to-wear line



Last month Mulberry announced that it was planning to let go of a quarter of its global workforce. The British brand best known for its luxury handbags has lost no time in implementing the strategy and is already preparing to shutter its offices in Paris and Hong Kong. 

According to information obtained by FashionNetwork.com, starting Spring/Summer 2021, the brand also intends to discontinue its footwear and ready-to-wear collections, which are produced under license by Onward Luxury Group. 

The brand is hoping to refocus on London and leather goods, its core activity. It will also continue to offer jewelry and its eyewear line, which is produced under license. Bags and small leather goods account for 70% of the brand's total sales. 

Both Brexit and the current economic climate have been hard on the brand which, faced with the effects of the coronavirus pandemic, is now in serious trouble. On 8 June, Mulberry issued a profit warning and announced that it would have to "manage [its] operations and cost base accordingly to ensure the company is the correct size and structure to reflect market conditions."

In reality, the fate of the brand's ready-to-wear line already looked to be sealed in March, with the announcement of the departure of creative director Johnny Coca. His last collection for Fall/Winter 2020-21 is still on sale. Coca joined the house in July 2015, as it sought to reposition itself around the high-quality accessible luxury segment and push forward with its international development. 

According to Drapers, Mulberry is also on the verge of closing one of its two British, Somerset-based production sites, where the company manufactures almost half of its bags and leather goods. The factory in question is "The Rookery," which is located not far from Bath, in Chilcompton, where the brand was founded in 1971. 

Drapers claim that around 50 of the site's 180 employees will be kept on and redeployed at the company's other factory, "The Willow," located in the historic industrial town of Bridgwater, also in Somerset. 

The strategy laid out by CEO Thierry Andretta a few years ago involved the expansion of Mulberry's offering in order to transform the company into a lifestyle brand, develop its brand universe, and generate traffic. However, Covid-19 and the economic crisis that it has caused have put paid to these plans. 

For the six-month period ended last November, the company's revenues totaled £68.9 million, flat in comparison to the same period in the previous year, while its gross profit fell from £42 million to £41 million and its pre-tax loss came to £9.9 million.

In February, British investor Mike Ashley acquired a 12.5% stake in Mulberry through Frasers Group, whose flagship House of Fraser department stores has sold the brand's products for several years.

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