Mulberry's Turnaround Appears to Be Underway

The brand made rather than lost money in the first half of the year.
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Lauren Indvik
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The brand made rather than lost money in the first half of the year.
Georgia May Jagger in Mulberry's fall 2015 campaign. Photo: Mulberry

Georgia May Jagger in Mulberry's fall 2015 campaign. Photo: Mulberry

Many troubled companies promise turnarounds, but few can deliver them — and far fewer with the speed of Mulberry, which announced on Thursday that it actually made rather than lost money in the first half of 2015. Profits before tax amounted to £100,000 (about $150,000) — a tiny sum, but welcome given the loss of £1.1 million (about $1.7 million) in the same period in 2014. Total sales for the first half were up by 5 percent to £67.8 million (about $103 million).

All of that may seem modest, until you consider all that Mulberry has been through over the past three years. The company has been busy rebuilding its business following the March 2014 departure of CEO Bruno Guillon, who was brought over from Hermès in 2012 to elevate the British heritage brand — and ended up alienating once-loyal customers instead. During his two-year tenure, Mulberry's profits tumbled, and the company lost two-thirds of its market value as well as its creative director of six years.

Since Guillon's departure, Mulberry has carefully cut costs, introduced lower-priced bags in the £500-£1,000 price range, and launched collaborations with "It" Brits Cara Delevingne and Georgia May Jagger. While wholesale sales continue to decline (down 11 percent to £17.4 million in the first half), sales in Mulberry's stores and on their website continue to grow in the double-digits, up 12 percent to £50.4 million collectively.

Much of the success Mulberry reported on Thursday is thanks to the work of Mulberry's Chairman and interim CEO, Godfrey Davis, as well as the in-house design team, which was without a creative director for two years. Soon, we'll see if Mulberry's new management team — Thierry Andretta, who was named CEO in March, and Johnny Coca, who joined the label from Céline in July — can continue to lift the company's prospects. Coca will show his first collection during London Fashion Week in February, which Andretta promises "will emphasize our Britishness and our heritage in leather, whilst delivering great quality within our targeted price range."