Mulberry swings to loss as tough UK trading and investments take toll
Mulberry’s total revenues and pre-tax profits both fell last year, despite healthy growth in its international sales.
The luxury brand known for its handbags saw a 6% like-for-like sales decline in its core UK market in the 53 weeks to March 30, which offset a 7% rise in international sales.
Total revenue was down 2% year on year to £166.3m – with adjusted profits before tax coming in at £1m, down from £8m the previous year.
As a result, Mulberry swung to a pre-tax loss of £5m, compared to a £6.9m profit in the 2018/19 financial year.
The retailer cited lower domestic footfall and tourist spending for the decline in its UK business and pointed to the wider travails hitting high street retailers up and down the country – including business rates, higher wages and rents.
Mulberry was also badly affected by the collapse of department store chain House of Fraser last summer, which resulted in a one-off £2.1m hit.
The brand said its digital sales increased 27%, which represented 22% of its group revenue, up from 17% the year before.
Mulberry boss Thierry Andretta also praised the retailer’s foray into Japan and South Korea and said its focus in the future would be on expanding its international and digital sales.
The group has delivered results in line with expectations and is making good progress in advancing its international strategy and direct-to-customer model whilst managing a challenging UK market, he said.
Andretta said that they have established new subsidiaries in Japan and South Korea and introduced important digital partnerships in China. International and omnichannel sales, driven by customer-centric focus, are increasing as a result.
He said that looking ahead, they anticipate that international and digital sales will continue to grow whilst UK retail trading conditions are expected to remain uncertain. The group plans to invest further in its new Asian entities during this development phase, enhance its global digital platform and optimise the UK network.