MIDAS Bag a part in the new Mulberry’s expansion

For some women, a handbag is not a handbag unless it has Mulberry on the side. From Britain to Beijing, the bags are highly coveted. For years, however, this national and international recognition failed to translate into profitability.

Founder Roger Saul loved the business with a passion, but under his stewardship it floundered and from 1998 to 2003 delivered a profit only once. This sorry state of affairs prompted a change of direction. Singaporean billionaires Christina and Beng Seng Ong effectively took control of the firm and former finance director Godfrey Davis became chairman and chief executive.

Under Davis, Mulberry has been steadily transformed. Excessive expenses were curbed, unproductive international partnerships were unwound and the business was reestablished on a more realistic, sustainable footing.

Results for the year to March 2010 will be published next week and brokers expect profits to increase by more than 40 per cent to £6million this year, rising to £6. 6million in 2011 and £8. 7million the year after. A dividend of 2p is forecast for 2010, increasing to 2. 2p next year.

Of course, Mulberry bags are not cheap, the average price is £500, but they are popular. Brokers believe the company has real potential, particularly in emerging markets, where conspicuous consumption is all the rage. Mulberry fits this bill perfectly and sales in Asia have been , strong. The company also has enormous appeal in america, where consumers are seduced by the quintessential ‘Englishness’ of the brand.

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