Mulberry grows first half sales but swings to loss
Luxury fashion brand Mulberry has grown its first half revenue by 10% to £74.5 million in the six months to 30 September.
However, the company made a pre-tax loss of £0.5 million after increasing its investment in the customer experience, creative talent and product design. It also incurred additional foreign exchange costs on overseas subsidiaries of circa £0.4 million.
Retail sales rose by 10% to £55.4 million in the period with like-for-like sales up 7%.
UK like-for-like sales rose by 7% while international like-for-likes saw an uplift of 10%.
The first collection under the creative direction of Johnny Coca was introduced across the network during the period with the full range available from August 2016. The company launched nine new bags, including an evolution and re-interpretation of the bestselling Bayswater design.
Mulberry has also announced the signing of an agreement with Challice to form a new entity to operate its business in China, Hong Kong and Taiwan. Challice, which owns around 56% of the company’s share capital, is under the same ultimate shareholder control as Club, Mulberry's existing distributor in the region.
Thierry Andretta, Mulberry chief executive, said: "Mulberry's new collection under the creative direction of Johnny Coca has been well received by our existing customers and a new audience.
“We have strengthened our balance sheet with tight inventory management leading to strong cash generation, enabling us to invest in international development and new products. The new business announced today in North Asia will progress our strategy of developing our retail and omni-channel model in key luxury markets.”
Looking at more recent trading, Mulberry has reported that total retail sales for the 10 weeks to 3 December grew by 4% with like-for-like sales rising by 3%. Tourist spending benefited sales in London, although domestic demand has softened in recent weeks.
Andretta added: “The UK and global outlook has become more uncertain since we last reported, however we are in a good position to continue to build our business."
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