Mulberry cuts H1 losses despite Covid-related drop in sales

Mulberry has reported a narrowing of losses in the first half of the
year despite a drop in revenue relating to Covid-19 and the forced closure
of its stores from the start of the period.

For the twenty-six weeks ended 26 September, the company managed to cut
its adjusted loss before tax to 1.9 million pounds compared to 10.1 million
pounds in 2019.

That was despite group revenue falling 29 percent to 48.9 million pounds
in the period.

Strong performers for the British luxury label’s were its digital sales,
which soared 68 percent in the period to 23.4 million pounds, and its Asia
Pacific sales, which were up 28 percent to 9.6 million pounds.

Mulberry said these categories partially helped to offset the impact of
the shut down in the UK, Europe and North America, with Q1 retail sales
down 31 percent. That has improved slightly since stores re-opened, with Q2
retail sales down 18 percent. However, sales in its capital city stores
such as Central London continue to be depressed, reflecting a lower level
of tourists and office workers.

Overall, the 25 percent drop in retail sales and a 49 percent drop in
wholesale and franchise sales led to a 29 percent reduction in group

Mulberry upbeat on improving sales

Mulberry said its overall sales trajectory has been improving since
earlier in the year, down 39 percent in Q1, then 18 percent in Q2. The
brand said that sales trend continued into October, with trading in the 8
weeks to 21 November was down 19 percent relative to the same period last

Last week, Mulberry was placed into an offer period after Mike Ashley’s
Frasers Group raised its stake in the label from 29.6 percent to 36.8
percent. Frasers Group has until December 17 to make a takeover offer for
the company.

“I am proud that in spite of the devastating effects of the global
pandemic, we have made further progress on our long-term strategy to build
Mulberry as a sustainable global luxury brand,” Mulberry CEO Thierry
Andretta said in a statement.

“This is focused around: a truly omni-channel network and market leading
digital platform, increased presence in Asia, and a relentless focus on
innovation and sustainability, offering our customers beautiful products,
made to last in our Somerset factories.

“This strategy enabled us to withstand some of the pressures that we,
and indeed the wider retail and hospitality sectors, have been faced with.
In particular, using our market leading global digital network to replace
retail sales with digital wherever possible, achieving high growth in China
and Korea, and reacting quickly to flex our agile supply chain, enhancing
market reactivity and reducing lead time, to match the increase in digital

Photo credit: Mulberry


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