Mulberry sales fall, Shein ventures into beauty

While the weather might be unpredictable lately, we’ve got something you can always count on: Retail Brew’s regularly scheduled fashion dispatch. This week, we’re watching a major luxury brand join the ranks of those impacted by the consumer spending slowdown, and a mega fast fashion retailer venture beyond fashion.

Mulberry sales fall

British luxury retailer Mulberry is feeling the burn of consumer pullback. On May 1, it reported a 4% drop in annual sales for its fiscal year ending on March 30. CEO Thierry Andretta blamed a “downturn in luxury spending,” especially in the UK and Asia, but said some losses were offset by “positive trading in the US…The trading environment in the UK and China remains challenging and we do not expect this to change in the short term,” he said.

Why this matters: Mulberry is just the latest in a long line of luxury retailers facing rising costs and consumers holding back on luxury purchases. Even large conglomerates like Kering are struggling as brands like Gucci and YSL—both under its umbrella—have reported declining sales over the past year.

Next sales climb

Next Plc, the fashion and homeware company that owns several hundred stores alongside an e-commerce business in the UK, reported a boost in sales in the first quarter of 2024. Full price sales grew 5.7%, beating analyst expectations of a 5% increase. Meanwhile, its profit outlook for the year remained $1.2 billion, because its Q2 results could be impacted by cold weather.

Why this matters: In the wake of a luxury slowdown, some fast fashion retailers have shown surprising resiliency. Take Zara parent Inditex, for instance, whose sales jumped 10% in 2023 and whose share price last month hit an all-time high.

Shein eyes skincare and toys

We all know Shein for its ultra-affordable offerings, like $6 tops and $9 dresses, but would you buy toothpaste or Tonka trucks from the retailer? Well, it’s in talks with brands like Colgate-Palmolive and Hasbro to get their products on its platform. At a recent event in Madrid, the fast fashion company presented its marketplace to retailers including Suntory Beverage & Food and cosmetics label Bella Aurora.

Why this matters: The move is part of Shein’s strategy to expand to categories beyond fashion and accessories. And since it reportedly more than doubled its profits in 2023, investing in products like cosmetics will only boost its portfolio as it prepares for its IPO.