Mulberry is navigating significant financial challenges this year.
- The luxury brand reported a pre-tax loss of £34.1m for 2024, a sharp fall from the previous year’s £13.2m profit.
- Group revenue fell 4% due to a tough second half, with UK and Asia Pacific sales particularly impacted.
- Despite setbacks, international sales saw an 8% rise due to growth in Sweden, the US, Australia, and New Zealand.
- Mulberry plans to raise over £10m to stabilise finances, with strategic reviews underway.
Mulberry, a name synonymous with British luxury, is facing unprecedented financial difficulty, culminating in a reported pre-tax loss of £34.1 million for the 52-week period ending 30 March 2024. This downturn marks a stark reversal from the previous year’s profit of £13.2 million, highlighting the tumultuous economic environment affecting the luxury sector.
The company’s financial health was particularly challenged in the second half of the fiscal year, resulting in a 4% decline in group revenue. This downturn was further evidenced by a 3.4% drop in retail sales within the UK and a 4.2% decrease in the Asia Pacific region, underscoring the broader macro-economic pressures at play.
Conversely, Mulberry experienced an 8% rise in total international retail sales, reaching £50 million, driven notably by market expansions in Sweden, the United States, Australia, and New Zealand. These gains indicate potential growth avenues despite prevailing challenges in other regions.
In response to the financial challenges, Mulberry is seeking to raise over £10 million through the issuance of new ordinary shares, complemented by a retail offer aimed at generating up to £0.75 million from existing shareholders. This move is intended to bolster the company’s balance sheet amid increasing debt facilities, which have risen to £27.5 million.
Andrea Baldo, who assumed the role of CEO in September, has outlined immediate priorities focused on enhancing operational efficiency and executing targeted strategies in product, pricing, and distribution to recover market share in the core UK market. Baldo emphasised a comprehensive review to establish a refreshed strategy conducive to both short-term recovery and sustainable long-term growth.
Mulberry’s Chairman, Chris Roberts, acknowledged the significant challenges posed by the global economic environment, which dampened consumer spending in the luxury sector. However, he remained cautiously optimistic about the group’s future, citing the new CEO’s leadership, the debt strategy, and capital-raising initiatives as crucial steps towards securing future growth.
Despite financial setbacks, Mulberry is taking decisive steps to address its challenges and position itself for future growth.
