British luxury brand Mulberry is taking strategic financial steps amid recent losses.
- Mulberry has announced plans to raise over £10 million through new ordinary shares amid recent financial challenges.
- The brand reported a pre-tax loss of £34.1 million for the year ending 30 March 2024, reversing from a profit the previous year.
- The new leadership is implementing strategies to enhance operational efficiency and regain market share.
- Global economic challenges have impacted Mulberry, prompting a strategic review for sustainable growth.
In a significant financial move, Mulberry has declared its intention to raise over £10 million through the issuance of new ordinary shares. This decision comes in response to the brand’s recent financial downturn, which saw a pre-tax loss of £34.1 million for the 52-week period ending 30 March 2024. This is a stark contrast to the £13.2 million profit reported in the previous year.
Further affecting its financial position, Mulberry’s underlying loss before tax was recorded at £22.6 million, compared to a £2.5 million profit the year prior. The decline in revenue was attributed to a challenging second half of the year, during which retail sales fell by 3.4% in the UK and 4.2% in the Asia-Pacific region. Despite these setbacks, total international retail sales grew by 8% to £50 million, fueled by positive developments in Sweden, the US, Australia, and New Zealand.
As Mulberry grapples with ongoing financial challenges in the first 25 weeks of fiscal 2025, group and retail revenue have decreased by 18% and 14%, respectively. The company’s debt facilities have increased to £27.5 million. In an effort to strengthen its balance sheet, Mulberry is not only issuing new shares but also launching a retail offer to raise up to £0.75 million from existing shareholders.
Newly appointed CEO, Andrea Baldo, who took office on 1 September, is spearheading efforts to revitalise the brand. Baldo emphasised the importance of enhancing operational efficiency and implementing targeted product, pricing, and distribution strategies to reclaim market share in the UK. Baldo is also committed to a comprehensive strategic review aimed at positioning Mulberry for short-term recovery and long-term sustainable growth.
Chairman Chris Roberts acknowledged the difficult macro-economic environment facing the luxury sector, noting the tightening of consumer spending globally. Roberts expressed confidence that the new CEO, debt facility, and capital raising initiatives will establish a firm foundation for Mulberry’s future growth.
Mulberry’s strategic financial initiatives underline its commitment to overcoming economic challenges and positioning itself for future growth.
