Mulberry, the renowned British luxury brand, has reported deeper financial losses for the latest fiscal period.
- The company faced a significant operating loss of £13.1m, marking a 25% decline year on year.
- Overall revenue decreased by 16% to £56.1m due to ongoing economic pressures.
- Regional sales saw a downturn, with notable declines in the UK and Asia-Pacific markets.
- Mulberry is implementing strategic measures to counteract these financial challenges.
Mulberry, well-known for its luxury goods, has reported an operating loss of £13.1 million for the 26 weeks leading up to 28 September 2024. This reflects a 25% year-on-year decrease. The financial strain is compounded by a drop in the group’s revenue, which fell by 16% to £56.1 million, compared to the same period in 2023. This decline is largely attributed to uncertain macroeconomic conditions affecting the brand’s performance.
In detailed figures, the company’s losses before tax were noted at £15.7 million, diminishing from the previous year’s £12.8 million. Regionally, UK retail sales fell 14%, totalling £31.3 million. More dramatically, sales in the Asia-Pacific region decreased by 31% to £9.3 million. Wholesale and franchise revenues were not spared, plummeting by 46% to £5.4 million.
Despite these challenges, digital sales proved a silver lining, contributing 33% to the total group revenue. In particular, UK digital sales increased by 6%, now comprising 67% of the overall digital revenue for the UK. This highlights a robust area within their operations amid widespread declines.
To address these pressing issues, Mulberry commenced several cost-containment strategies. Such actions involve adjusting inventory levels to match expected revenues more closely and restructuring their operational framework to increase efficiency. The newly appointed CEO, Andrea Baldo, has emphasised their determination to optimise operations by streamlining processes, improving margins, and enhancing the company’s cash position.
Furthermore, the company is actively revising its product, pricing, and distribution strategies while holding discussions with luxury wholesale partners to ensure a broad market presence. A strategic review is underway, anticipated for completion in December, which may lead to further announcements.
In addition to these initiatives, Mulberry sought to fortify its financial foundation through a public share issue in September, raising £10 million. This move bolsters their balance sheet and provides necessary financial flexibility in the pursuit of restoring profitability.
The brand faced an external challenge as Frasers Group proposed an £83 million takeover in September. Although the offer was later increased to £111 million, Mulberry’s board, backed by Challice, the majority owner, dismissed the bid. They expressed a desire to maintain focus on strengthening business performance rather than selling under prevailing market conditions.
Mulberry is navigating complex economic challenges with strategic adjustments aimed at regaining financial stability.
