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Mulberry cuts H1 losses despite Covid-related drop in sales

By Huw Hughes

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Business

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 revenue.

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 year.

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 demand.”

Photo credit: Mulberry

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