Mulberry pre-tax profit plummets 27.7%

British fashion label & retailer Mulberry has seen pre-tax profit fall 27.7 per cent to £26 million in its full year as it continued to invest in international stores in a bid to target affluent shoppers, it has been announced today.

For the year ended March 31st 2013, total group sales fell 2.01 per cent to £165.1 million, as poor sales across its wholesale division impacted performance.

Wholesale revenue slumped 16 per cent to £57.9 million amid “account rationalisation and destocking by Asian partners”, the label said.

In March, Mulberry issued a profit warning as a result of “disappointing” post-Christmas trading and Bruno Guillon, Mulberry‘s CEO commented today: “Mulberry ended the year to 31 March 2013 in line with the guidance given in March.

“After three years of rapid growth, we have had a year of consolidation during which we have laid the foundations for the transition of Mulberry from a UK success story into a global luxury brand.

“In particular we are increasing UK production and enhancing both our retail experience and product range.”

Earlier this week, it was announced that Mulberry‘s Creative Director Emma Hill, who has been in her role since 2008, is to depart following a disagreement between Hill and the label‘s management over its creative and operational strategy, it has been reported.

Hill had been responsible for introducing some of the label‘s most famous and popular handbags and thus such disappointing results come at a difficult time for the brand.

However, across its retail division, sales reached £107.2 million, up eight per cent on a total basis and six per cent LFL and the division has continued to perform well since the start of the new financial year, Mulberry noted.

For the 10 weeks to June 8th 2013, total retail revenue jumped nine per cent and six per cent LFL while the retailer anticipates “modest growth” across wholesale in the year ahead.

Expansion remains a key focus for the label, which opened 17 international stores over the year and a further three since March 31st 2013 and Mulberry is targeting an additional 15 to 20 new store opening in the coming year.

Guillon noted that the label is keen to strengthen its presence in both Europe and emerging markets as it eyes further growth, commenting: “Mulberry has a well-established business in the UK and a growing presence in Europe.

“With over 80 per cent of our sales derived from these markets where the economic climate remains difficult, Mulberry‘s challenge for the future is to accelerate our brand awareness in the USA and Asia. Greater visibility in Asia will allow us to benefit from tourist traffic in Europe and the USA at the same time as growing our business locally.”


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