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Mulberry falls into the red

Mulberry made a loss before tax of £5m in the 53 weeks to 30 March, down from a profit of £6.9m in 2018, amid a “challenging” UK market.

Revenue fell 2% for the year to £166.3m. International sales were up 7%, but UK sales declined 6%.

Adjusted profit before tax for the period fell 87.5% to £1m.

Adjusting items totalled £6m and included the cost of launching in South Korea, a profit write-back on the conversion of its wholesale partnership with John Lewis to a concession business model, write-offs associated with House of Fraser’s administration, and fixed asset impairment costs.

During the year the business reduced its inventory by 11% to £39.7m and launched new subsidiaries in Japan, as well as South Korea.

Online sales increased by 27%, and represented 22% of group revenue, up from 17% in 2018. Around 90% of Mulberry’s revenue is now generated through direct to consumer channels, following the transition of its John Lewis account.

Mulberry’s total retail sales were up 13% for the 11 weeks to 15 June, including a 31% uplift internationally and a 7% rise in the UK. The brand launched on Farfetch in April.

CEO Thierry Andretta said: “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.

“We have established new subsidiaries in Japan and South Korea and introduced important digital partnerships in China. International and omnichannel sales, driven by our customer centric focus, are increasing as a result.

“Looking ahead, we 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.”



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