The British luxury brand Mulberry continues to face financial difficulties, reporting a £13.1 million operating loss for the 26 weeks ending 28 September 2024, a 25% year-on-year decrease.
- The luxury brand also reported a pre-tax loss of £15.7 million, a 23% decline compared to the previous year, indicating ongoing financial challenges.
- Group revenue experienced a significant drop of 16% to £56.1 million, impacted by unpredictable macroeconomic conditions.
- Retail sales suffered a downturn both domestically and in Asia-Pacific, while digital sales showed resilience, growing 6% in the UK.
- Mulberry’s strategic measures aim to streamline operations and strengthen financial stability amidst a turbulent market environment.
Mulberry, the esteemed British luxury brand, has once again reported significant financial losses for the first half of the 2024 fiscal year. The company documented an operating loss of £13.1 million, a marked decrease of 25% from the same period in the previous year. Despite a challenging economic landscape, Mulberry remains committed to navigating these complexities.
The brand’s pre-tax loss totalled £15.7 million, reflecting a 23% decrease from the prior year’s figures. Revenue also fell by 16% to £56.1 million, predominantly due to ongoing macroeconomic uncertainties. These factors have weighed heavily on the company’s financial performance, affecting various segments of its operations.
Domestic retail sales within the UK saw a 14% decline, reaching £31.3 million, while the Asia-Pacific region experienced a substantial 31% drop to £9.3 million. In addition, franchise and wholesale revenue diminished significantly, by 46% to £5.4 million. These downturns illustrate the widespread challenges the brand is currently facing in traditional retail channels.
Conversely, digital sales have shown some resilience, comprising 33% of total group revenue. Notably, UK digital sales rose by 6%, now making up 67% of the company’s digital income in the region. This shift underscores the changing consumer preferences and the increasing importance of online retail amid broader market shifts.
In response to these conditions, Mulberry has undertaken several strategic initiatives aimed at reducing costs and enhancing operational efficiency. The brand, which achieved B Corp certification in September, is actively managing inventory to align with anticipated revenue levels. According to Andrea Baldo, the newly appointed CEO, steps have been taken to streamline processes, adjust product and pricing strategies, and engage with luxury wholesale partners to ensure market presence. Mulberry is focused on enhancing its financial footing while aiming for profitability in the near future.
A strategic review, encompassing product, pricing, and distribution adjustments, is slated for completion in December. Mulberry anticipates a stronger financial performance in the second half of the year, owing to the crucial festive trading period. Earlier in the year, the company planned to issue new shares to raise £10 million and launched a retail offer to bolster its balance sheet, steps that have provided added financial flexibility.
In an interesting development, Frasers Group launched a takeover bid valued at £83 million in September, later increasing it to £111 million, which was subsequently rejected by Mulberry’s board. The decision was influenced by the majority owner Challice, who deemed the timing unsuitable for such a transaction. Instead, Mulberry remains dedicated to improving its commercial performance and leveraging its brand strength.
Mulberry aims to navigate the current economic uncertainties with strategic adjustments and a focus on enhancing profitability.
