Bags of growth ahead for Mulberry

The models of fashion week have skulked away, the fashionistas have hotfooted it to Milan, followed by Paris, and the bloggers and hangers-on have dispersed.

You could be forgiven for thinking that the hullabaloo of London Fashion Week would have barely registered in a sleepy, slightly soggy corner of Somerset. But visit two buzzing buildings – one near Bridgwater and one in Chilcompton – and you would be proven very wrong.

Mulberry’s two factories, where the luxury brand’s “it” bags are hand-made, stream the fashion group’s shows and events on to big screens. Posters of its latest ad campaigns are plastered all over the building and news of recent store openings fill the notice boards.

Even though it didn’t hold a fashion show this year – it is waiting until it finds a new creative director to replace Emma Hill, who left last autumn – Mulberry still made the headlines during Fashion Week as it unveiled a new range of bags designed by the model of the moment, Cara Delevingne.

At the factories, Mulberry’s chief executive, Bruno Guillon, wants all its employees to understand what the company is about.

He said: “The DNA is British. This is the heart of the brand.”

Now the Somerset stitchers and sewers have doubled in number in the biggest single investment in UK fashion manufacturing in recent years. Last summer Mulberry opened a second factory and hired and trained locals from scratch. By the summer it will have 330 people making bags in its new Willows factory, adding to the 270 people in its original Rookery factory. It is now one of the biggest handbag manufacturers in Europe.

But it is this detail that is causing problems for Mulberry. The arrival of Mr Guillon, a Frenchman, at the authentically British brand has upset some of its loyal fans. After three profit warnings since he joined in March 2012, Mr Guillon is under pressure from Mulberry shareholders and the fashion world.

Mr Guillon was hired to take Mulberry upmarket and make it a global luxury brand, but progress has been slow. He stands accused of alienating existing shoppers while failing so far to win over new ones with his higher-priced bags – such as £1,600 for a Willow Tote. The bags made in the UK cost more to produce, so the prices have gone up. But hang on, wasn’t Mulberry always a British-made brand?

In fact, up until two years ago less than 20 per cent of its bags were made here. After the opening of the second factory last summer, more than 50 per cent of the bags are made in Britain, and that is why they are more expensive. Mr Guillon explained: “The price of quality leather hides has risen more than 20 per cent a year and we are now making more in the UK. So prices have to rise.

“When you see the time and skill that goes into these creations, you understand the cost.”

He said his bags are actually a “super bargain” compared with rivals that make their bags in Asia. Last week on a tour of the Somerset factories – dressed exquisitely and complete with a Mulberry man bag (the Matthew, which Mr Guillon says is the “perfect 24-hour bag”) – he raved about the quality of the products.

Some of its most complicated bags can take around seven hours to make – in 41 steps – and the leathers used are high end with everything from cow, goat and ostrich to alligator. Looking at the delicately weaved and plaited handle of a Dorset bag – cost: £595 – with group supply director Ian Scott, Mr Guillon declared the brand’s identity is wholly British and it is important to invest here to retain that. Mulberry has spent £7.5m building the Willows factory near Bridgwater – a state-of-the art facility that recycles rainwater and is complete with solar panels – and won another £2.5m in government funding to train deprived people in the area.

At the Willows, a new batch of apprentices started the five week training this month; they will eventually master some of the steps to making a Mulberry bag. The craftspeople work in teams and the retail prices of bags are displayed in clear view to remind them of their worth and also the value of hitting targets and keeping their work precise.

On many of the 41 steps there is less than a half-millimetre margin of error and rejects get sent back by the quality checkers, who inspect every single bag. Bridgwater has high levels of unemployment and deprivation. Mr Scott said that more than 1,300 people turned up at an open day held by Mulberry with the local college and over 3,000 applied for the 300 jobs available. Of the current employees at the Willows, 20 per cent were previously unemployed for more than six months.

Mr Guillon admitted that hiring and training them is a risk. In the last batch, he said, two people didn’t stay on after the five weeks of training. But the apprentices can rise fast and one of the recent intake has already been made supervisor.

Another of Mr Guillon’s initiatives is that he has put a stop to bags being made for the discount market – the designer outlets such as Bicester Village – so now only faulty or end-of-line leftovers will be sold in outlets. Mr Guillon is a fierce believer in not discounting and Christmas sales were hit because rivals had gone on sale early while Mulberry waited until Boxing Day. He said: “These people in the factory work so hard, we do not want to sell these bags at a discount. And if you discount, the margin is reduced.”

Mr Guillon is also cautious about relying too much on one moneyspinner. “‘It’ bags are good but they are also dangerous,” he said. A successful brand should have a “portfolio” of bags. “We shouldn’t become dependent on one bag only”. The Bayswater makes up about 27 per cent of bag sales but its Alexa, which accounts for around 12 per cent of its business, caused it to run into trouble in Korea. It was so popular there for a while that when the trend waned, its overall sales were hit badly. He said: “We want the brand to be talked about, not just individual bags.”

Although he is obsessed with the Britishness of Mulberry, this doesn’t mean its new designer has to be a Brit. Mr Guillon is now shortlisting potential candidates for the post of creative director. He says “talent” is the requirement, not nationality.

He takes any criticism about his strategy in his stride. As an avid sportsman, he loves a challenge – he trains for Iron Man competitions in his spare time and has tried everything from heli-skiing to kite surfing and has even survived an avalanche while skiing.

His taste for adventure is also fulfilled in his regular trips abroad looking for new stores for Mulberry.

Mr Guillon might be on a mission to take Mulberry into the future but he has not forgotten its past. He often praises founder Roger Saul, who was ousted in a boardroom coup in 2002. He said Mr Saul, who created the brand in 1971, was ahead of his time. “It is impressive how creative he was at Mulberry. So innovative.”

The heritage of the brand is important but Mr Guillon knows it is the success of Ms Delevingne’s new collection and the eventual arrival of a new creative director that will shape its future.