Mulberry, a top fashion’s stock in the making

With its yearly profit more than tripled, an increasing squad of style icons queuing for its iconic handbags and an ever fashionable clothing line, Mulberry has definitely acquired all merits to be called the ‘new Burberry’ and to fight for the fashion

Englishness reign.

The Mulberry’s success does not just hit the catwalk but the trading floors, as its stock was the world’s best-performing fashion retail one last year, rising 526%. Recent financial figures now show that Mulberry's revenue for the year ended March 31 has increased by 69 per cent to £121.6 million, while profit before tax has risen by 358 per cent to £23 million. And there’s still room for more growth. After 40 years of quintessentially British fashion wit, the heritage brand is totally hitting its stride with sales up by 42% in the first quarter of this year.

Thanks to smart strategies and partnerships as that ever copied than ever one of teaming up with another star on the rise, Alexa Chung, who let her name the most sought after satchel in the recent history; the fashion house has just reported a five per cent rise in sales, which has seen shares rocket from £2,800 to £17,470 in the last year and put the value of the UK company at £1.03billion.

Recently, the luxury goods company added 4.8 per cent to £18.40 – even though Chairman Godfrey Davis declared the sale of 205,000 shares at £18 each. In the last decade its share price has shot from 40p to more than £17. It is planning a network approaching 60 stores in Asia, and reported pre-tax profits of £23.3m last month, a more than fourfold annual rise. Overseas revenue also more than doubled to £40.5 million in that year.

According to Bloomberg data, Mulberry, which is listed on the London Stock Exchange, has seen its share price rise 527 per cent to 1,758 pence (S$34.35) in the past 12 months, making it the best performer in the apparel retailers segment. Bloomberg added that among all retailers, Mulberry is behind only PT Mitra Adiperkasa, an Indonesian company that runs Starbucks and Sogo department stores in Britain.

Not bad, Mr the company’s Chairman stresses, for a company started “on a kitchen table” in 1971, when Mr Saul sold his leather belts and chokers to Biba. Davis was elevated to chairman in 2002, when Mulberry’s founder, Roger Saul, was ousted by the group’s majority shareholder Christina Ong, the Singaporean billionaire who injected £7.6m of capital into the group in 2000. It took five years to the new managerial team to return to profitability from a quite scary yearly loss of about £2 million a year. In 1972, she opened the first Club 21 multi-label store in Singapore. Club 21 now owns the licence to manufacture, market distribute and operate boutiques for Armani Exchange, Calvin Klein and DKNY jeans in Europe and Asia.

On top of that, the Ong family’s Club 21 business is Mulberry’s Asian partner, and has made most of the capital investment in its expansion. A separate partner operates its Korean stores, which should reach 20 by next March. As roughly explained in a conference with investors, the priority will be up to 30 stores in China, more in Korea, Japan, Singapore and Taiwan, plus up to 12 stores in “key European capitals”. “We have pins in the map of where we want shops, but we won’t open on the wrong street to get to that number,” Davis explained in a recent for the Financial Times. In the US, its New York flagship opens in September, while “a small group of stores on the West Coast” is planned.

Angela González-Rodríguez