Mulberry’s half year losses widen as it focuses on “rebuilding and reprioritising” its brand
Mulberry has reported a decline in sales and profit as it begins work to rebuild and reprioritise its brand.
In the 26 weeks to 28 September, sales fell by 19% to £56.1 million as retail sales in the UK and overseas dropped by 14% and 17% respectively.
A 31% reduction in Asia Pacific retail sales was partially offset by a 2% increase in the rest of world.
Meanwhile, gross margin reduced to 67% mainly due to stock optimisation to manage inventory and working capital levels.
However, operating expenses decreased by 16% to £50.7 million as the company took action to manage its cost base.
Mulberry has posted an underlying pre-tax loss £15.3 million for the period compared to a loss of £12.3 million at the same time in the previous year.
Andrea Baldo, the recently appointed chief executive of Mulberry said: “Though I’ve only been in the role of CEO for under three months, the first half results illustrate the clear need to reprioritise and rebuild the business.
“Combined with our unique position in the market, offering responsible luxury products of unmatched quality and longevity, crafted in our Somerset factories, Mulberry truly is one of a kind.
“We are now working on initiatives to renew the brand’s relevance, initially for UK consumers and then for our international audience.
“In response to current market conditions, we have taken decisive steps to streamline operations, improve margins, reduce working capital, and strengthen our cash position. This has also meant reviewing our internal team structure to ensure we become a leaner, more agile organisation.
“Additionally, we’ve made strategic adjustments to our product, pricing, and distribution strategies, and we’ve begun discussions with luxury wholesale partners to ensure we are present wherever our customers shop.”
Giving an update on more recent trading, Mulberry said the current macro-economic environment, including ongoing inflationary pressures, continues to present uncertainty and challenges for its business.
It added that Baldo’s initial focus will be on enhancing operational efficiency and targeted product, pricing and distribution strategies to improve its margin and cash position.
Trading for Mulberry’s full financial year is expected to be weighted towards the second half and the busy festive period.
Baldo added: “With the teams’ efforts on cost-cutting, a strengthened balance sheet, a renewed brand-first approach and a refreshed business strategy-details of which I’ll share in due course-I am confident we are making the right moves to bring Mulberry back to profitability.”
