It Remains To Be Seen Whether Mulberry Will Succeed In China'S Market Layout.

Unlike other luxury brands, Mulberry has lost the lead in the early twentieth Century due to decision errors, and its performance has declined. Although it has rebounded, it still has a gap in overall development level compared with Coach, Kate Spade and other light luxury brands. At the same time, its sales situation has recently been hit by the depreciation of the pound.

In addition, Coach, Michael Kors, Kate Spade and other light luxury households have occupied the Chinese market for a long time. Whether Mulberry's layout can be successful remains to be verified by time.

In China, a relatively low-key British luxury brand Mulberry recently announced a high profile in the Chinese market.

In early December, Mulberry and its largest shareholder, Challice limited, established Mulberry (Asia) Limited, which is mainly responsible for the business development of the Greater China region, including Mainland China, Hongkong and Taiwan, and will set up 4 stores in China to improve the full channel network under the online and offline businesses.

Unlike other luxury brands, Mulberry has lost the lead in the early twentieth Century due to decision errors, and its performance has declined. Although it has rebounded, it still has a bad overall development level compared with Coach, Kate Spade and other light luxury brands.

In early December, Mulberry and its largest shareholder, Challice limited, established Mulberry (Asia) Limited, which is mainly responsible for the business development of the Greater China region, including Mainland China, Hongkong and Taiwan, and will set up 4 stores in China to improve the full channel network under the online and offline businesses.

It is reported that Mulberry will contribute 2 million pounds to control 60% of Mulberry (Asia) Limited share capital.

Mulberry expects that the new company will lose money in the first two years of its establishment and will only make profits in third years.

Meanwhile, Mulberry will spend about 3 million pounds on marketing in Asia.

Mulberry, the British luxury group, announced recently that it will establish a new company Mulberry (Asia) Limited, a major shareholder of Challice's Club 21 division, which is responsible for Mulberry's operations in mainland China, Hongkong and Taiwan. Meanwhile, it will open 4 stores in China and establish an official Chinese website to build a full channel network with online and offline integration.

Public information shows that at the end of the first half of this year, Mulberry has 67 direct outlets worldwide, a net increase of 1 stores over the same period last year, and 2 to 55 stores in Asia, Europe and the Middle East.

Thierry Andretta, chief executive of Mulberry, said the new company has accelerated Mulberry development in Asia.

At the same time, it hopes to attract a new generation of young consumers growing up in the Internet age.

Data show that in the first half of fiscal year ended September 30th, Mulberry sales increased by 32%, accounting for 14% of total sales.

In the past 2009-2012 years, Mulberry sales have soared.

It sold 59 million pounds in 2009 and 72 million pounds in 2010. In 2011, brand annual sales exceeded 100 million.

In 2012, Mulberry grew by 38%, gaining 169 million pounds sales.

However, due to the wrong decision of Bruno Guillon, the chief executive of Hermes, Mulberry went to the high-end luxury sector, but was badly hurt by Waterloo, losing core consumer groups, declining sales and profits.

Mulberry market value evaporated 2/3.

In 2015, Mulberry returned to light luxury and its performance finally rebounded.

Earnings data show that Mulberry in fiscal year 2015 pre tax profit of 6 million 200 thousand pounds, the total sales of 156 million pounds, an increase of 5% over the same period.

As of September 30, 2016, sales in the first half of fiscal year Mulberry increased by 9.9% to 74 million 500 thousand pounds, and Thierry Andretta said that the price performance of Mulberry is the highest in the luxury goods industry.

About 70% of Mulberry handbags are priced at 500-995 pounds.

In addition, the new creative director Johnny Coca's series of design works received good market reaction and strong sales trend.

However, due to the increase in investment costs and the depreciation of the pound, Mulberry still lost 342 thousand pounds in the first half of the fiscal year.

Remain optimistic about the performance of the second half of the year.

Data show that as of the second half of December 3rd, Mulberry retail sales increased by 4%.

However, sterling exchange rate fluctuations had a great impact on Mulberry. While promoting tourist consumption, it also reduced the desire for domestic shopping in the UK. The same store sales in the UK slowed from 7% in the first half to 3%, while international same store sales slowed from 10% to 1%.

It is reported that as of July 2, 2016, Coach has 185 stores in Greater China, including 165 stores in the mainland.

According to Coach, in the 2016 fiscal year, Coach increased 14 stores in Greater China.

This is not the first time Mulberry has entered China.

In 2011, Mulberry opened its first flagship store in China, and then opened 3 stores in Beijing and Shanghai.

However, due to the location of stores, market operation and other issues, did not cause enough response, sales performance is not ideal.

Since its entry into Shanghai in 2010, Coach, a lightweight luxury brand, has been working hard in the Chinese market and has achieved outstanding performance.

In fiscal year 2012, Coach's sales in China increased by more than 60% to $300 million.

Until the 2013 fiscal year, it maintained a 40% increase.

After a period of downturn, as of July 2, 2016, the four quarter of Coach

For $1 billion 150 million, an increase of 15%.

Meanwhile, in the 2016 fiscal year, Coach sales increased to $4 billion 490 million, up 9%.

In addition, the rapid growth of Michael Kors in China is obvious.

At present, Michael Kors has more than 100 stores in Greater China.

In June 2016, Michael Kors withdrew its franchise in Greater China at a price of US $500 million.

In the three quarter of 2015 fiscal year, Michael Kors grew by more than 20% in China's market performance over the same period.

In the face of the downturn in the luxury market, Thierry Andretta said that although the Hongkong market is still tough, the mainland is recovering. He believes that the new joint venture is an opportunity for them to grow in China.

However, the fierce competition of many luxury brands in the Chinese market may not bring good performance opportunities to Mulberry.

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