Wednesday, 20 July 2011

Mulberry crosses £1 billion valuation



british retailer mulberry's share price rose 4.78% yesterday and closed at £18.40 per share. mulberry has about 59 million issued shares, at yesterday's close they crossed the billion pound mark. to be exact, mulberry was valued at £1,088,718,800 at yesterday's close. share price increased more than six fold over the past 12 months. why has investors taken a shine to this label?

i speak for myself, as an investor i look for potential in a brand. mulberry has been very successful, churning out it bags like the "alexa" and "bayswater". they do show ready to wear, but i doubt sales of apparel makes up a significant amount of their current turnover. it's almost like couture shows, fashion houses do it to shift jewellery and perfume. i really do think they staged the shows to sell their core products: bags. so there is really potential to turn ready to wear into something a little more significant when the time is right, an area marked for growth. and then there's their menswear range, which is pretty small and in my humble opinion could do miles better. reworking the famous "alexa" and "bayswater" from womenswear and turning them into "postman's lock" and "piccadilly" just doesn't do it for me in my books. i feel there is enormous potential on their menswear front yet to be unleashed and tapped. and then there is uncharted territories of fragrance and beauty, which seemed so logical considering their current target market of young working and trend savvy females.

and all these potential do translate into investors' optimism. i for one put money where my mouth is. i bought a few hundred shares back at the beginning of this year, and sold them two weeks ago at £17, yielding me a 70% profit. i am very pleased, as money sitting in my bank gives me laughable interest right now. elements of luck and also doing my homework, the money is tucked away now towards that illusive flat deposit, ever so difficult for a first time buyer. oh grown up problems.



if there's one thing i learn: pick a developing brand so there's room for sales and share price growth. i deliberated for the longest time, if i should invest in prada (1913.HK). it sounded all glamorous and sexy, but i feel it's a very mature brand. every product area is well developed, and the room for revenue growth would be to open more stores in the far east, which i don't know how sustainable it is in the long run or next 5 year cycle. many believed that the ipo was an exit plan for the founders, and several analysts commented that prada's share price was also over-valued. that made me a little uncomfortable. so yes, back to the researching desk for other probable investments for me.

best move on before i incur the wrath of those at prada. here are a few little known facts about mulberry: 86.65% of their share capital are not traded in public, so chances of a surprise #LVMHermes style saga shouldn't surface. and as english as mulberry is, this company now worth in excess of £1 billion is actually majority owned by two singaporeans, property mogul mr. ong beng seng and his wife mrs. christina ong. mrs ong is also the driving force behind club 21, a luxury retail conglomerate which you might have heard of. together they own 57% of mulberry. fascinating?

happy days!



#BillionBerries
- mulberry clipper leather holdall, mrporter.com
- mulberry postman's lock weekend bag, selfridges.com
- mulberry brynmore messenger bag, mrporter.com
- mulberry rockley weekend bag, selfridges.com
- mulberry piccadilly holdall, selfridges.com



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3 comments:

  1. Love these posts, would love to invest in mulberry if I had a spare bean

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  2. thank you :) wrote till 3am for this post though, can't do it every day!

    gotta accumulate to speculate!

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  3. Absolutely love it when I login and see these posts! I learn something new everyday from you. Thanks a bunch Joe!!!

    ReplyDelete

what's he wearing?