Mulberry posts £8.2m loss as House of Fraser collapse hammers margins

1108
Regent street

Mulberry has been hammered by the collapse of House of Fraser as it revealed multi-million-pound losses in its interim results.

In the six months to September 30, the fashion retailer posted a total revenue drop of eight per cent to £68.3 million, despite international sales growth of 13 per cent and global online sales growth of five per cent, now accounting for 17 per cent of sales.

In the UK, Mulberry saw sales dive 11 per cent year-on-year, though it insisted its local operations remained profitable.

This decline in sales was largely attributed to the collapse of House of Fraser, which incurred a one-off £2.1 million cost.

Both this and a £2.5 million bill for Mulberry’s launch into South Korea led to an overall loss before tax of £8.2 million, up dramatically from a £600,000 loss a year earlier.

Its current financial difficulties seemingly did little to dampen Mulberry’s expansion drive, having opened 28 stores in Asia and a new flagship on London’s Regent Street during the period.

“We are delivering on the strategy to develop Mulberry as a global luxury brand with new subsidiaries in Korea and Japan, the creation of digital partnerships in China and the additions to our own store network in Asia,” chief executive Thierry Andretta said.

”In the UK, our most important market, we are pleased to have signed a concession agreement with John Lewis & Partners, advancing our direct to consumer reach.

“We are proud to be the largest manufacturer of luxury leather goods in the UK and remain committed to supporting ‘Made in England’ through our two Somerset factories.

”We are confident that our focus on international growth is the correct strategy to develop Mulberry. We are well positioned for the Christmas trading period, which as ever, will determine our full year result.”

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