Mulberry, a British luxury brand, reveals a significant financial downturn, planning strategic moves to mitigate losses.
- The company reported a pre-tax loss of £34.1m, a notable decline from the previous year’s profit.
- To bolster its balance sheet, Mulberry intends to raise over £10m through new shares and a retail offer.
- International retail sales grew despite overall revenue declines, highlighting mixed market performance.
- New CEO Andrea Baldo focuses on operational efficiency and strategic review for recovery and growth.
In recent fiscal results, Mulberry reported a significant financial setback with a pre-tax loss of £34.1m, contrasting sharply with the £13.2m profit recorded in the previous year. The underlying loss before tax stood at £22.6m compared to a £2.5m profit in the prior period, illustrating the challenge the brand faces.
To address these fiscal setbacks, Mulberry plans to raise over £10m by issuing new ordinary shares and up to £0.75m through a retail offer from existing shareholders. These measures aim to strengthen the brand’s financial position amidst its swing to a loss for the 52 weeks ending 30 March 2024.
Despite a challenging second half of the year, international retail sales rose by 8% to £50m, driven by positive developments in Sweden, the US, Australia, and New Zealand. However, overall group revenue declined by 4%, affected by a 3.4% fall in UK retail sales and a 4.2% drop in the Asia Pacific region.
In the initial 25 weeks of fiscal 2025, Mulberry reported continued struggles with an 18% decrease in group revenue and a 14% decline in retail revenue year on year. Debt facilities have increased to £27.5m, further highlighting financial strains.
Newly appointed CEO Andrea Baldo, who took over on 1 September, has prioritised enhancing operational efficiency and implementing targeted product, pricing, and distribution strategies. Baldo expressed a commitment to conducting a comprehensive review to develop a refreshed strategy aimed at both short-term recovery and long-term sustainable growth.
Chairman Chris Roberts acknowledged the year’s macro-economic challenges impacting the luxury sector, citing a global tightening of consumer spending. However, he remains optimistic that the combination of leadership change, new debt facilities, and capital raising efforts will set the group on a path towards future growth.
Mulberry’s strategic initiatives aim to stabilise its financial health amidst challenging market conditions.
