Mulberry sales on the rise after first half profits fall
Mulberry said the outlook for the second half of its financial year looks encouraging as retail sales rise despite a 36% fall in first half profit.
The luxury fashion group, which issued a profit warning in October due to slowing international demand and a cut in its wholesale network, saw pre-tax profit fall to £10 million in the six months to 30 September from £15.6 million a year earlier. Operating costs rose by £4.6 million.
Group sales grew by 6% in the first half to reach £76.5 million. Retail revenue rose 13% to £46.5 million while like-for-like sales increased by 7%. However, there was a 4% decline in wholesale revenue to £30 million which Mulberry said was a reflection of account rationalisation and a more challenging environment.
Online sales were up 44% to £6.9 million in the first half of the year, accounting for 9% of group sales.
Mulberry saw an improvement in sales in the nine weeks to 1 December with retail revenue rising 19% and like-for-like sales up 11%.
Chief executive Bruno Guillon commented: "Mulberry has delivered 6% sales growth for the period. The UK retail business and key wholesale accounts have continued to perform well in the context of a challenging economic environment.
"During the period, we have rationalised certain wholesale accounts and refocused the outlet business, which has impacted financial performance in the short term. However we firmly believe that this is in the long-term interests of transforming Mulberry into a global luxury brand."
In the UK retail sales rose 9% to £39.2 million in the first half while international retail sales grew by 40% to £7.3 million.
The group has opened new stores in Singapore, Frankfurt, Washington DC, and Munich since 30 September. It plans to open a further five to eight stores by the end of the financial year which will bring the total number of worldwide openings for the year to between 17 and 20.
Mulberry said: "We currently anticipate full year revenue and profit to be in line with market expectations. We remain confident in the long term opportunity and outlook for the business."
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