British fashion label & retailer Mulberry has seen pre-tax profit plunge 36 per cent to £10 million in its first half year, according to figures released today.
Gross margin fell 61.3 per cent in the six months ended September 30th 2012, which the group said reflects its commitment to improving the quality of its products in a bid to broaden its international reach.
Retail sales rose 13 per cent over the period to £46.5 million as like-for-like (LFL) sales rose seven per cent though wholesale suffered as a result of “a more challenging environment” the group said in a statement with sales at £30 million, a four per cent fall on the same period last year.
Such disappointing figures follow a profit warning issued by the luxury brand in October which forecast that group revenue growth for the year to March 31st 2013 will be below market expectations.
However, total revenue over the half year increased six per cent to £76.5 million while online sales soared 44 per cent and the second half has seen an encouraging start, with retail sales in the nine weeks to December 1st rising 19 per cent on last year as LFLs grew 11 per cent.
Driving sustainable growth by re-affirming the significance of its luxury offer is a crucial aspect of the label’s strategy and during the half period, Mulberry opened eight new international stores in Europe, the US and South Korea, leaving it on track to deliver 17 to 20 new store openings by the end of the 2012/13 fiscal year.
Looking ahead, Mulberry CEO Bruno Guillon said: “We continue to focus on creativity, craftsmanship and quality and will place great emphasis on reinforcing Mulberry’s luxury positioning through the quality of our products, retail experience, marketing communications and choice of distribution channels.
“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.
“British leather craftsmanship is central to our brand and we have now commenced construction of our second UK factory which will create 300 new jobs and open during the summer of 2013.”
Full year revenue and profit, while dependent on the key Christmas trading period, is expected to be in line with market expectations.