Mulberry seeks to secure £10 million in funding amidst financial challenges.
- The company reports a pre-tax loss of £34.1 million for the fiscal year.
- Group sales decreased by 4% year-on-year, affecting overall performance.
- Mulberry plans to issue new shares and launch a retail offer to strengthen its position.
- New CEO Andrea Baldo outlines strategy for short-term recovery and long-term growth.
Mulberry, the renowned luxury fashion retailer, is undergoing significant financial challenges and is poised to raise over £10 million in capital. This strategic move follows a reported pre-tax loss of £34.1 million for the year ending on March 30, marking a stark reversal from the previous year’s profit of £13.2 million. This downturn is attributed primarily to a 4% year-on-year decrease in group sales, compounded by a particularly difficult second half.
In the first 25 weeks of the current financial year, Mulberry’s struggles continued with an 18% decline in group revenue and a 14% drop in retail revenue compared to last year. The downturn is largely attributed to a broader slowdown in the luxury market, impacting consumer spending patterns. In response, Mulberry plans to issue new ordinary shares, aiming to raise £10 million. Additionally, a retail offer has been launched to accumulate up to £750,000 from existing shareholders to bolster its financial foundation.
Andrea Baldo, who recently assumed the role of CEO, is at the forefront of Mulberry’s recovery efforts. Baldo remarked, ‘Since joining, I have been working closely with our teams in the UK and internationally to drive swift, decisive actions.’ Baldo has prioritised enhancing operational efficiency and implementing refined product, pricing, and distribution strategies to recapture market share within the UK’s core market. Baldo also indicated, ‘While these immediate measures are critical, I am now fully committed to conducting a comprehensive review to develop a refreshed strategy that will position the group for both short-term recovery and long-term, sustainable growth.’
Mulberry Chairman Chris Roberts echoed these sentiments, acknowledging the hefty macro-economic challenges faced by the luxury sector globally, which have led to tighter consumer spending. However, Roberts remains optimistic about Mulberry’s future, citing the appointment of Baldo, along with a new debt facility and capital raising as pivotal steps that, ‘will put the group on a firm footing to ensure we are well set up for future growth.’
Mulberry’s strategic initiatives aim to address current financial challenges and set the stage for future sustainable growth.
