Mulberry has updated the market on trading for the year ended 31 March 2015, an update that shows signs of revival for the British luxury brand after an ailing attempt to push upmarket.
The Bayswater bag maker alienated core customers during former CEO Bruno Guillon’s leadership, but saw positive retailing trading in early December 2014, following its introduction of the Spring/Summer 2015 collection into stores at the beginning of November. The SS15 collection is the first Guillon would not have overseen, and includes a range of bags priced between £500 - £800. Retail performance has continued to improve over the last three months and revenue for the year ended 31 March 2015 will be in line with expectations at £148m.
A full year growth in Retail revenue of 1% has however, been more than offset by a previously announced decline in the brand’s Wholesale business.
Mulberry’s Retail division saw the better growth in the second half of its year, particularly online. As a result of “careful cost control”, profit before exceptional items for the year ended 31 March 2015 is expected to be slightly ahead of market expectations.
At the end of each reporting period, the carrying value of store assets is assessed and as a consequence, Mulberry expects that the reported results for the year ended 31 March 2015 will include exceptional non-cash impairment costs relating to five of its newest stores (Washington, Berlin, Frankfurt airport, Zurich and Vienna). In compliance with accounting standards, the retailer is required to give predictions on 5 years’ time. As those stores overseas are relatively young and there is a lack of certainty, Mulberry has taken the conservative approach and is expected to be charged between £2.5 and £3m – fees that will be reversed if those stores perform well.
Mulberry Chairman Godfrey Davis is positive about the future, commenting:
“The encouraging Retail trends over the last five months reflect our reinvigorated product offer and focus upon our customers. We are delighted to have announced the appointment of our new CEO, Thierry Andretta and look forward to the arrival of our new Creative Director, Johnny Coca, during July.”
While revenue is lower than the previous year’s £163m, the FTSE 100 company is on the road to recovery.