Mulberry continues to face financial challenges, reporting an operating loss of £13.1 million for the first half of 2024, marking a 25% decrease compared to the previous year.
- The luxury brand’s pre-tax loss reached £15.7 million, a 23% drop from last year’s £12.8 million, while overall revenue declined by 16% to £56.1 million due to ongoing economic uncertainties.
- UK retail sales saw a decrease of 14% to £31.3 million, and sales in the Asia-Pacific region fell by 31% to £9.3 million, with franchise and wholesale revenues also shrinking by 46% to £5.4 million.
- Digital sales have remained strong, comprising 33% of Mulberry’s total revenue, with UK online sales increasing by 6%, indicating a shift towards digital platforms.
- Mulberry, having earned B Corp certification, is implementing cost-saving measures and strategic changes to its products, pricing, and distribution to align with market conditions.
Mulberry’s financial performance continues to struggle, as reflected in its reported operating loss of £13.1 million for the 26 weeks ending 28 September 2024. This represents a 25% drop compared to the previous year, attributed to ongoing macroeconomic challenges.
The British luxury brand has seen its pre-tax losses grow to £15.7 million, down 23% from the previous period’s loss of £12.8 million. Overall revenue fell by 16%, reaching £56.1 million, impacted by uncertain market conditions.
Retail sales in the UK declined by 14% to £31.3 million, while the Asia-Pacific region experienced a more significant drop of 31%, with sales amounting to £9.3 million. Franchise and wholesale revenues decreased by 46%, totalling £5.4 million.
Despite these declines, digital sales have proven robust, forming 33% of Mulberry’s total revenue. UK digital sales increased by 6%, now making up 67% of total digital revenue in the UK. This shift underscores consumer preference for online shopping.
In light of these financial challenges, Mulberry has taken steps to manage its costs effectively. It has been awarded B Corp certification and is committed to aligning inventory levels with revenue expectations for the year ahead. CEO Andrea Baldo has highlighted the company’s decisive actions to streamline operations and improve financial margins.
Baldo stated, “In response to current market conditions, we have taken decisive steps to streamline operations, improve margins, reduce working capital and strengthen our cash position.” He also mentioned strategic changes to the product range and pricing, as well as distribution strategies.
Mulberry is conducting a strategic review, which is set to conclude in December. This includes discussions with potential wholesale partners aimed at expanding the brand’s presence across various shopping platforms.
Trading for the full financial year is expected to favour the latter half, particularly during the festive season, as Mulberry works towards improving performance. The company also plans to issue new shares to raise £10 million, with a retail offer to boost funds further by £0.75 million.
In an attempt to acquire Mulberry, Frasers Group launched an £83 million takeover bid, which was initially rejected. A second offer, increased to £111 million, was also turned down by Mulberry’s majority owner, Challice, who deemed the timing unsuitable for a sale. The board has since committed to focusing on enhancing the brand’s commercial success.
Mulberry’s strategic adjustments aim to address its financial strains and return the company to profitability amidst challenging market conditions.
