Mulberry benefits from Markle sparkle

Considering what has been coined ‘the Kate effect’ – when items worn by the Duchess of Cambridge sell out globally within minutes – Mulberry is surely hoping for a similar result. Not that UK sales need much of a boost – the weak pound has encouraged an influx of tourist shoppers to the British capital, which has helped lift total UK retail sales by 1 per cent, and continued to offset weaker domestic demand in the second half.

Outside of Britain, investors are keen to see Mulberry push further into Asia. A new venture with Onward Global Fashion was established to develop operations in Japan, with five stores opening across Tokyo, Kyoto, Nagoya and Osaka. As of 4 December 2017, Mulberry Japan was officially formed to develop the distribution network and local brand awareness. Mulberry Asia – a separate entity – anticipates adding another three stores in China before the end of the financial year. This should lessen dependence on wholesaling and strengthen the retail channel in the region. It should be noted that these numbers only include sales from the Hong Kong outpost, with further Asia-based sales expected to trickle through by the end of the year.

Online and digital operations are also benefiting from closer attention. The company has focused on making more stock available to online customers, and introduced same-day delivery across London, as well as click-and-collect in UK stores.  

Analysts at Barclays expect EPS of 10p for the year ending March 2018, from £9m in pre-tax profits, compared to 11p in FY2017.