Mulberry hit by tough trading and House of Fraser administration
Mulberry saw its sales decline by 8% to £68.3 million in the six months to 30 September as trading was hit by tough trading conditions and the impact of House of Fraser’s administration.
UK retail sales were down 11% in the period although international sales climbed by 13%.
The results meant that the company made an underlying pre-tax loss of £3.6 million compared to a loss of £0.6 million in the same period in the prior year. After one-off costs for House of Fraser and the company’s launch in the Korean market were taken into account, the reported loss before tax was £8.2 million.
During the half year Mulberry opened a new flagship store concept on London’s Regent Street. However, it also closed three House of Fraser concessions and one standalone store in the UK.
Following the acquisition of three stores during March as part of the Mulberry Asia acquisition, a further store opened in China in Xian Shin Kong Place. Mulberry also acquired five stores in Japan and 18 in Korea.
In August Mulberry reported that it would take a profit hit of around £3 million due to the collapse of House of Fraser. The company has now signed a concession agreement with John Lewis.
Commenting on the results, Thierry Andretta, Mulberry chief executive, said: "We are delivering on the strategy to develop Mulberry as a global luxury brand with new subsidiaries in Korea and Japan, the creation of digital partnerships in China and the additions to our own store network in Asia.
“In the UK, our most important market, we are pleased to have signed a concession agreement with John Lewis & Partners, advancing our direct to consumer reach. We are proud to be the largest manufacturer of luxury leather goods in the UK and remain committed to supporting "Made in England" through our two Somerset factories.”
Looking at more recent trading, Mulberry said UK retail like-for-like sales were down 7% in the six weeks to 3 November.
Andretta added: “We are confident that our focus on international growth is the correct strategy to develop Mulberry. We are well positioned for the Christmas trading period, which as ever, will determine our full year result."
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