West-based global luxury fashion brand Mulberry – famous for its iconic handbags – is planning a major assault on the Japanese market and is to sell its products in Australia and Vietnam for the first time.
The group, based at Chilcompton, near Radstock, today said it is in advanced negotiations on a new 10-year distribution agreement in Japan – a highly-lucrative market which it admits it has not targeted strongly enough in recent years.
While the firm, which celebrates its 40th anniversary this year, has in the past run its own store in Japan, it has not made the kind of strides in the country it has achieved in other parts of South East Asia and the Middle East by working with distributors and retailers.
The Japanese expansion will be made with a joint venture vehicle owned by Mulberry’s existing Asia Pacific distributor Club 21 and Mammina Co, a unit of Japanese department store chain Isetan Mitsukoshi Holdings (IMH).
Under the agreement IMH, one of the largest department store chains in Japan, is to make ‘shops-in-shops’ space available to Mulberry including its new flagship stores in Tokyo and Osaka ‘on a progressive basis’.
Separately, Mulberry today announced the expansion of its key distribution agreement with Singapore-based Club 21, taking the brand into Australia and Vietnam.
Mulberry’s existing 10-year distribution agreement with Club 21 started in 2005 and covers the distribution of its products in China, Singapore, Malaysia, Taiwan, Indonesia, Thailand and the Philippines.
The extension agreement runs until 2021.
Club 21 has opened 12 Mulberry stores in Beijing, Hong Kong, Kuala Lumpur, Singapore, Taipei, Bangkok and Sydney since 2005. The deal generated wholesale sales for the group of £5m for the year ended March 31.
Club 21 is ultimately controlled by Ong Beng Seng and Christina Ong, who also control Challice Limited which has a 57% stake in Mulberry.
Mulberry said in a statement to shareholders: “The board expects the Club 21 contribution to group sales to increase significantly over the coming years due to new store openings and increasing penetration of the Mulberry brand into these markets.”
Mulberry chairman and chief executive Godfrey Davis said: “The Asia Pacific region represents a significant growth opportunity for the Mulberry brand and these two agreements lay the foundations for an accelerated penetration of the region, especially China and Japan.”
Shares in Mulberry have increased nearly fourfold over the past year but were today down 7.5% in a falling market.
In June Mulberry unveiled full-year pre-tax profit growth of 358 per cent to £23.5m.
