Manolo Blahnik has second-best year to date, despite impact of luxury slowdown

It may still be a relatively small independent in a luxury world dominated by deep-pocketed global giants but Manolo Blahnik is upbeat, despite revenue and profits falling last year, and it’s planning for a 2025 rebound, driven by global expansion.

The company has just unveiled “robust operating profit” and its “second-best year to date” but clearly wasn’t immune to the luxury slowdown last year. It said turnover in the 12 months to the end of December dropped to €106.5 million from €118.2 million. And pre-tax profit was down 30% at €15.4 million, in line with group expectations. But operating profit stayed strong at 15% of total revenues.

Of course, it was always going to be difficult to match the 2022 figures given that was its best year so far and one that benefitted from the post-pandemic bounce.

The numbers were as it had expected and the company said that during the year, it “made good progress in laying the foundations for international growth. The group heavily invested in its systems infrastructure and implemented a new ERP that went live in early 2023. This has led to improvements throughout the supply chain as well as unifying reporting and creating efficiencies throughout the business”.

It also invested in the acquisition of its UK global headquarters (in the heart of London’s West End, in Mayfair) in September, “further deepening its foundations as a British brand”. The new head office is undeniably impressive and combines the can’t-miss-it historical element of the neighbourhood with an understated luxe feel. It’s in a Grade 1 Listed Georgian building on Old Burlington Street, London with over 14,500 gross sq ft of office space and a “spectacular” showroom.

As far as customer-facing investments were concerned last year, it overhauled its webstore, a process that “delivered increased conversion metrics” and saw the September launch of ‘The Craft Room’, the second phase of its award-winning digital 50-year archives using VR. The virtual archives have attracted over a million views to date.

It saw strength in its men’s offer too. The company had kicked off its menswear awareness programme at the end of 2022 and carried it through 2023, leading to “consistent increases in the top line contribution from this category”.

Manolo Blahnik didn’t give any specific figures for 2024, but did say that “as a result of the ongoing macroeconomic and geopolitical headwinds in the market”, it continues to “carefully manage costs whilst progressing its strategic global investment plans which are focused on an anticipated return of consumer confidence in 2025”.

One of those future-focused plans came this spring with the news of its joint venture in Hong Kong with the Bluebell Group, “thus crystallising wider growth plans in the Asian territory”. Its first of three stores for 2024 opened in Lee Gardens.

It also incorporated a Wholly Foreign Owned Enterprise (WFOE) in China and will start trading at the end of 2024. Its first store in mainland China will be in Shanghai.

North America and Europe remain a focus too with “key openings” due early next year. It’s prepping stores in Miami Design District and Milan, both new cities to operate direct retail in for the brand.

CEO Kristina Blahnik said of all this: “As expected, in 2023 our performance rebalanced off the back of an extraordinary year of sales and consumer demand in 2022, and in light of the challenging macroeconomic and geopolitical environment. Against this backdrop, however, we are pleased to still be reporting a strong performance in our second-best year ever in line with our business plan.

“In 2024, we will see a continued readjustment to pre-Covid demand. We have used this period to restructure our D2C and B2B models following a considered decision to consolidate our wholesale network and develop our own distribution channels.

“The strategic progress we have made in 2023 in developing our global expansion plans as well as the investment into our teams, infrastructures and new London Head Office, places us in a position of strength from which to grow once consumer confidence rebounds.

“Manolo Blahnik has the luxury of being an independent heritage brand with a long-term, financially stable business model giving it the agility to adapt to ever-changing environments.”