Mulberry swings to H1 loss as UK shoppers rein in spending

British luxury brand Mulberry has reported a loss in the first half of the year as its UK retail sales were hit by the cost of living crisis.

The Somerset-based handbag specialist posted a pre-tax loss of 3.8 million pounds in the six months to October 1, compared to a profit of 10.2 million pounds a year earlier.

It came as consumers tightened their purse strings amid economic uncertainty, with retail sales in its home market of the UK dropping 10 percent in the period, while international sales were broadly flat at 17.5 million pounds.

On a brighter note, retail sales in China, which has been hit hard in recent years by lockdowns, increased 6 percent despite ongoing restrictions, which contributed to a 1 percent increase in Asia Pacific retail sales.

“We have delivered a resilient performance across the group, supported by strong international demand and continued investment in the UK,” chief executive Thierry Andretta said in a statement.

Current trading improving

Mulberry said there has been an improved trend in retail revenue for the eight weeks to November 26 compared to the prior-year period, but added “there remains ongoing uncertainty in the economic and geopolitical environment”.

The company said it expects gross margin in the second half to be maintained at first half levels.

Andretta continued: “Looking ahead, we are confident in our ability to execute our strategy and to continue to invest across the group for our future growth, in spite of the challenging economic and geopolitical backdrop.

“We are well placed for the festive trading period and will continue to drive the business forward to the benefit of all stakeholders.”