Bottom Line: Overseas is the only place for luxury to grow

 
Elizabeth Fournier

IN THE UK, Mulberry is usually mentioned in the same breath as Burberry, with both brands attracting big name stars to their catwalk shows and campaigns, and copycat handbags rife on the high street.

But the comparison is somewhat unfair. Burberry – with a market cap of £6.5bn and 206 stores (excluding concessions) worldwide – is very much the big sister to Mulberry, which has just 123 stores and a market cap of around £604m. Its rival has certainly created some big footprints to fill. Burberry now makes almost 60 per cent of sales outside of Europe, and Asia Pacific is by far its most lucrative region by revenues. Mulberry, on the other hand, is hugely underexposed to the Asian market – just 10 per cent of its European sales are to Asian customers (compared to a 40 per cent average across the luxury market), while Asia Pacific makes up only 12 per cent of sales, again much lower than the 29 per cent average. With recent research suggesting that by 2018 the region will be the biggest in the world for luxury goods, there’s clearly room for more than one British heritage brand to grow.

The good news is that Mulberry seems to have a plan to make the most of the huge opportunities; the bad news is that it’s costing money – a lot of it. Expectations are high, but for those willing to go along for the ride the rewards could be worth waiting for.

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