Mulberry Grows, Not Without Pain

Mulberry is suffering growing pains as it expands internationally. The British accessories and ready-to-wear group said in a statement last Thursday that sales at Mulberry's U.K. stores were up 36 percent in the nine weeks to Dec. 1. With a hope to create awareness in the US and Korean markets, much money has been spent on advertising campaigns, store openings, manufacturing equipment, public relations and marketing activities. They also plan expansion in the Middle East, recently joining with the Chaloub Group, a luxury brand distributor for the region. New shops will open in Jeddah, Saudi Arabia, and in Kuwait over the next six months. The brand will also be opening stores in Hong Kong, Singapore airport and Shanghai and in two department store corners in South Korea over the next six months. "Our program of reinvesting in the business is already benefiting the company, and customer awareness in Asia and the U.S. is growing," said Godfrey Davis, chairman and chief executive officer to WWD. "The group continues to make steady progress while the foundations for international growth in the medium term are laid." But there was a price to pay. profits plummeted 44 percent to 815,000 pounds, or $1.7 million, from 1.5 million pounds, or $3.1 million, due mainly to those advertising, marketing and administrative costs linked to the new store openings in the U.S. and Asia. The company added that, despite increasing manufacturing space, changing production methods and investing in new machinery at its factory in Somerset, England, it was unable to keep up with demand for its purple patent Bayswater bags. They have also announced that Emma Hill will be the new creative director. But Katie Grand had been offered the job and quit before she even started. Why? Because Mulberry couldn't afford to give her the support she needed to both design the collection and continue her outside activities as editor of Pop magazine and stylist to Louis Vuitton, Prada, Miu Miu, Proenza Schouler and others.