Feb. 18 - As London Fashion Week draws to a close, another season has come and gone without a full catwalk show from British luxury fashion group Mulberry. It’s just issued yet another profit warning and is still looking for a new creative director. Joanna Partridge asks what’s going wrong as Mulberry tries to turn itself from a British success story into a global brand.
Could a hot young model be the answer to Mulberry's woes? Catwalk star Cara Delevingne helped design the latest collection by the British luxury fashion group. And her made-in-England handbags were unveiled during London Fashion Week. But for the second time Mulberry has skipped a full catwalk show as it searches for a new designer. It's also issued three profits warnings in eighteen months and has problems at home and overseas. Stephen Springham is from Planet Retail. SOUNDBITE: Stephen Springham, Senior Retail Analyst, Planet Retail, saying (English): "Mulberry is very much a business in transition, it's renowned as a UK business, it's trying to spread its wings and become much more of a global luxury brand. That may seem a small thing, but it's obviously very, very hard to actually achieve." CEO Bruno Guillon has been at the helm for just over a year, after joining from Hermes. Under him, Mulberry has increased prices to move more upmarket - some handbags selling for two and half thousand pounds. But that appeared to backfire over Christmas, with lower sales in its home market and as Korean wholesalers cancelled a large order. It's struggled too in the City - its shares are over 50% lower than a year ago. And it's now several months since the departure of creative director Emma HIll, who was credited with making Mulberry's bags into must-haves. Taking a traditional British name and turning it into a global brand is sometimes known in the trade as "doing a Burberry". But as Mulberry is finding out, this international transition has plenty of pitfalls associated with it. Burberry trenchcoats and tartan have taken off around the world in the past few years, especially in China. Despite its recent troubles, Mulberry's CEO said at the end of January it intends to stick to its growth strategy. SOUNDBITE: Stephen Springham, Senior Retail Analyst, Planet Retail, saying (English): "Trying to open in appropriate locations across the globe, be that Europe or Asia. It's fairly aggressive in the context of a business the size of Mulberry, I think they turn over I think about £165 million, so they're relatively small, but to actually open 10, 15, 20 international stores a year, that's quite a big undertaking, and obviously quite an expensive undertaking as well. So you know you can see why profitability is under pressure." As another London Fashion Week draws to a close, one of its former darlings is hoping its latest collection brings it back into fashion - with both shoppers and investors.