The short version: Mulberry’s sales rose 18.1% in the six months to 26 September, led by a 28% jump in the US, and it got there while cutting promotions rather than adding them. In a season when the biggest luxury groups are shrinking, a British leather house is growing at full price.
Mulberry Group, the British leather goods company, said in a trading update on 19 October that group sales for the 26 weeks to 26 September rose 18.1% at actual exchange rates and 18.2% at constant currency. Every region grew. US sales rose 28%, with like-for-like sales up 34%; Europe outside the UK rose 23%; the UK rose 10%; and Asia-Pacific rose 5%, with like-for-like sales there up 24%, according to the figures reported by Investing.com and TheIndustry.fashion. Franchise and wholesale sales jumped 52% and now make up 17% of the total.
The detail that matters most is the one that usually goes the other way in a turnaround. Mulberry said promotional sales fell by 300 basis points as a share of the total, excluding markdowns. Chief executive Andrea Baldo called the growth in full-price sales “particularly encouraging”, while warning that the company is still operating in a challenging trading environment and that there is more to do. Investors liked what they read: the shares rose about 7% on Monday, to around 245p, according to RTTNews.
The numbers behind the 18%
The growth is real, but it comes off a low base and it is sales, not profit. Mulberry has not yet published a profit figure for the half; full interim results are due on 19 November. Its annual results in July showed the underlying loss narrowing to £8 million from £24.1 million the year before, according to TheIndustry.fashion. The company kept its medium-term targets of annual revenue above £200 million and a 15% adjusted operating margin.
The US number deserves a closer look. Mulberry linked it to stronger demand, better digital performance and a wider wholesale presence, including the launch of Bloomingdale’s Marketplace, according to AskTraders. Wholesale growth is fast growth, but it is also borrowed reach: a brand selling through someone else’s store gives up margin and some control over how it is presented. The 52% jump is a sign that American retailers want Mulberry on their floors. It is not yet proof that American shoppers will seek Mulberry out on their own.
The products doing the work are the ones you would expect from a house that has rediscovered its own archive. TheIndustry.fashion lists the Raffia, Crochet and Stevie styles and the Darley camera bags as strong performers, with steady demand for the Bayswater and the Lily, and the new Delilah bag carrying the second half.
Why Mulberry is growing while the giants shrink
Mulberry is growing because it sits in the price band where luxury demand has moved. LVMH reported last week that its fashion and leather goods sales fell 5% in the third quarter, a decline we unpacked when the figures landed. The houses that pushed their core handbag prices hardest are finding the limit of what the aspirational shopper will pay. Mulberry sits below them, in the bracket where a well-made leather bag is still a considered purchase rather than a trophy.
The second reason is focus. Baldo’s plan, branded “Back to the Mulberry Spirit”, is a list of things not to do: fewer promotions, less discounting, more investment in the brand itself. In September the company held its first runway show in six years, Mulberry by Christopher Kane, after appointing Kane as creative director of women’s ready-to-wear in March. Baldo credited the show with stronger customer engagement and more traffic across stores.
The third reason is less comfortable. Frasers Group, the owner of Flannels and House of Fraser, holds a 37% stake in Mulberry, according to TheIndustry.fashion, and has spent this year assembling a luxury portfolio that now includes Harvey Nichols and The Webster, plus stakes in Hugo Boss and Burberry. We wrote in August about what the sale of Harvey Nichols said about the luxury middleman. A brand rebuilding its full-price discipline while its largest shareholder runs a volume-led retail business is a tension worth watching.
The Faz read
It is worth being honest about what Mulberry is and is not. It is not an independent designer label. It is a listed company, partly owned by a retail conglomerate, and by The Handbag Clinic’s 2021 estimate only about 30% of its bags are made in England. But it is also proof of something independent and craft-led brands have been arguing for years: that the shopper who still buys luxury has not stopped spending, but has stopped overpaying for a logo.
The same pattern ran through Brunello Cucinelli raising its growth forecast last week at the very top of the market. At both ends, the brands growing are the ones with a clear product identity and the restraint not to discount it. The math compounds: every season a brand sells at full price, the next season’s full price becomes more believable. Every sale teaches the customer to wait.
The weak point is that sales growth at this stage is the easy part. A turnaround is judged in its second and third years, when the comparisons get harder and the temptation to chase the big houses on price returns. Whether this recovery holds depends on whether Mulberry keeps its prices in the band that is working.
What it means if you buy, own or sell Mulberry
If you are buying new, expect fewer markdowns. A brand that has just told the stock market its promotional share fell by 300 basis points is not going to undo that in the Christmas sales. If a full-price Bayswater or Lily is on your list, buying it when you need it is likely to cost the same as waiting.
If you own one, full-price discipline is good news. Brands that stop discounting tend to hold their value better on the secondhand market, because the price of a new bag sets the ceiling the resale market works below. Classic, long-running shapes like the Bayswater, which the company itself names as steady sellers, are the safest to hold.
If you are buying secondhand, the core styles are where the supply is deepest and the authentication knowledge is best documented. Older Mulberry pieces in good leather remain one of the better-value routes into British leather goods. Inspect the leather, the stitching and the hardware yourself, or buy through a reseller that does.
What happens next
Mulberry reports full first-half results, including margins and profit, on 19 November. A new 979 sq ft store opens at Liverpool ONE in November, according to TheIndustry.fashion, and the Delilah bag is the product the company is counting on for the second half. The question for 19 November is whether the gross margin has caught up with the sales line.
The honest reading
One good half does not make a recovery, and Mulberry’s own chief executive says as much. But the shape of the growth, at full price, through the core bags, in the price band the giants abandoned, is the right shape. It tells you where the market for a good leather bag actually is.
The next move is yours.
Sources: Investing.com, Mulberry first-half trading update · TheIndustry.fashion · RTTNews · AskTraders · TheIndustry.fashion, Frasers Group Luxury
