Mulberry Asia, a novel co-venture between the British fashion brand and Challice Limited, is all set to open four stores in Hong Kong, China and Taiwan and a Chinese language eCommerce site. This move came after the company’s sales for half year rose by 10 per cent.
Mulberry will cease its current distribution agreement with Club 21, although its new partner Challice, shares the same ultimate ownership.
Mulberry Asia will have 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.
According toThierry Andretta, CEO, Mulberry, the new venture would progress the group’s international strategy of developing its retail and omni-channel model in a key luxury market where the company witnesses a significant growth opportunity.
Mulberry Asia is expected to be operational from Spring 2017.
Andretta further said, “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.”
Moreover, as 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 shot up by 10 per cent in the half year, compared to the 11 per cent decline in the same period last year.
As per Strachan, 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.
Strachan further added, “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. Opening of its new Covent Garden store was fortunate timing to showcase its new collections to this influx of lucrative shoppers. 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.”