Fashion retailers Superdry, Burberry and Mulberry released figures this week. All spoke of expansion online, and through wholesale partners that are helping them to reach new customers around the world.
Superdry: investing in operations and digital
Fashion retailer Superdry today reported growing revenues in its latest half-year, as online and wholesale expansion made up for falling income from its stores. The retailer has improved its B2B digital platform for wholesale customers, allowing them to place forward orders as well as buy on the current season, and it brought digital into stores through RFID stock control technology as it looks to boost its operational performance.
So far, RFID is in place in 30 stores, at the beginning of a rollout to all owned stores that is expected to complete next autumn. As a result, said Superdry, it has seen “faster, more targeted and more efficient replenishment of stock, allowing store colleagues additional time to focus on sales and improving Superdry’s working capital efficiency.” It now has a single stock pool for wholesale, ecommerce and retail inventory in its EU distribution centre and has also enabled online fulfilment from its US distribution centre. “As well as enhancing our delivery proposition to customers in this market, this capability also opens up further distribution opportunities through third-party ecommerce partners,” it said.
The retailer, in a pre-close trading statement for the 26 weeks to October 15, reported overall brand revenue, excluding China, of £831.8m. That’s 6.4% up on the same time last year. Group revenue of £414.6m was 3.1% up. Stores remained Superdry’s largest channel, albeit a declining channel. Income from stores came in at £177.4m over the period, down by 2.3% on the same time last year, despite a 9.4% rise in average retail space to 1.1m sq ft. Wholesale brought in £171.8m, up by 7.8% on the same time last year, while ecommerce turned over £65.4m, up by 6.9% on last time.
Chief executive Euan Sutherland said Superdry, ranked Top50 in IRUK Top500 research, had made significant progress in the first half. “We are six months into a product diversification and innovation programme and, as we said in the summer, it will take up to 18 months for the benefits to come through. In the meantime, we are well prepared for peak trading and the team remains highly focused on the delivery of sales growth and further efficiencies in the remain of the year. Superdry is a strong brand with significant growth potential, based on not only on product diversification and innovation but also on our category extension and geographic expansion opportunities and our ability to leverage our multichannel operating model to serve customers in whichever way suits them best.”
Burberry: relaunches under Riccardo Tisci
Upmarket fashion retailer Burberry, a Top250 retailer in IRUK Top500 research, reported a 3% fall in revenue to £1.2bn in the half-year to September 29 – but pre-tax profits of £174m were 36% up on last time and the retailer said it had made “good progress as we began to transform and reposition Burberry.”
It set out how it used print and digital media to launch its first new logo for 20 years, an effect amplified through social media. The half-year saw the launch of Kingdom, its first collection under new chief creative officer Riccardo Tisci, with a vision of a Burberry “that is as much for the young as for the old.” The retailer said the response had been “exceptional”, including from wholesale partners and on vogue.com, where it was the second most-viewed show of the season.
Overall retail sales were flat at £944m while wholesale excluding beauty, grew by 9% to £254m but changes to its beauty licensing model led to an 18% fall in wholesale revenues.. Digital sales grew, led by the Asia Pacific region, and Burberry said its collaboration with Farfetch had performed ahead of expectations.
Mulberry: hit by House of Fraser closure
Luxury leather group Mulberrry this week reported falling sales and said its bottom-line profits had been hit in part by the demise of department store House of Fraser, subsequently bought out of administration by Sports Direct, where it had three concessions.
Mulberry, which makes and sells leather goods including handbags, is ranked Top350 in IRUK Top500 research, has now signed an agreement to open concessions in John Lewis & Partners, which it previously supplied on a wholesale basis.
Mulberry reported total revenues of £68.3m in the six months to September 30 – down by 8% on the same time last year. The business strategy is to develop as a global luxury brand, and international retail sales grew by 13%. Its global digital retail sales rose by 5% to account for 17% of all of its sales. That’s up from 14% last time. But UK sales fell 11% in total to £40.4m, and by 7% on a like-for-like basis, which strips out the effect of store – and business – openings and closures. Pre-tax losses came in at £8.2m, from a loss of £0.6m a year earlier. Some £2.1m of that loss was attributable to the closure of House of Fraser concessions. However, Mulberry will aim to make most of its annual profits in the run-up to Christmas: last year it reported profits of £6.9m in the full year.
Chief executive Thierry Andretta said: “We are delivering on the strategy to develop Mulberry as a global luxury brand with new subsidiaries in Korea and Japan, the creation of digital partnerships in China and additions to our own store network in Asia.
“In the UK, our most important market, we are pleased to have signed a concession agreement with John Lewis & Partners, advancing our direct to consumer reach. We are proud to be the largest manufacturer of luxury leather goods in the UK and remain committed to supporting ‘Made in England’ through our two Somerset factories.”
The retailer said that its digital business had grown to 17% of sales via its own website, while an estimated 20% of all its sales, including via third-party retailers, are made online. This, it said, had been achieved through consistent investment in its digital and omnichannel platform, as well as through digital concessions with strategic partners including JD.com and VIP.com. This partnerships, it said, enabled Mulberry to “broaden its customer reach and localise its service offering, particular across new and high growth territories such as China.”
Mulberry currently sells from 88 directly operated stores and concessions – up from 66 at the same time last year, as well as online.
Image courtesy of Superdry