English brands Mulberry and Dr Martens have a common problem: marginality is at risk. The first records a loss for the first half of the year, while the second had a 5% decrease in earnings before taxes. The results were caused by the increased prices. Yet, Mulberry recorded increasing sales in October and November and trusts in the turnover that will be generated by the Christmas sales.
The common problem of Mulberry and Dr Martens
Losses
Mulberry (on the right in photo), the leather goods brand headquartered in Somerset, recorded a loss before taxes of 3.8 million UK pounds during the April-September semester. During the same period of last year, it had earnings for 10.2 million (before taxes). Revenue slightly decreased during 2022, going from 65-7 to 64.9 million pounds, with a 10% loss during the 2nd quarter. This has to do with the fact that retail sales in the UK have been reduced, as consumers spent less to face the higher cost of living. The brand states that sales improved in October compared to the same period of 2021.
Increasing prices
Dr Martens (on the left in photo) will increase the price of its boots by 6%. This will help the brand compensate for the higher cost of labor, energy and supplies, including soles and leather. The increase will hit stores next Fall: “We will raise prices only to cover inflation. This year we upped our prices for the first time in 2 years”, explains CEO Kenny Wilson (source: The Guardian). Dr Martens has recorded a 5% decrease in its earnings before taxes, equal to 44.7 million UK pounds for the fiscal semester that closed on September 30th. The result is significant, given the 13% increment in sales (418.6 million pounds). According to the company, the lower profitability was caused by higher expenses for marketing, workforce and new stores.
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