Mulberry swings to £5m loss after House of Fraser collapse

2207
// Mulberry posted a £5m loss in full year trading
// Cites “challenging” domestic market after £2.1m hit from House of Fraser collapse
// International revenue up 7% as brand continues expansion

Mulberry posted a pre-tax loss of £5 million in the year ending March 30, down from £6.9 million in pre-tax profit the previous year.

The British luxury bag maker said it had taken a £2.1 million hit from the collapse of House of Fraser, adding to general weakness in its “challenging” UK domestic market.

Revenue from sales was down two per cent to £166.3 million.

International revenue rose seven per cent for the year, but UK revenue dropped six per cent to £114.6 million. 

Across the year the business launched new subsidiaries in Japan and South Korea and opened new stores in New York and Dubai.

Meanwhile sales on its digital platforms rose 27 per cent.

Mulberry achieved £1 million in adjusted pre-tax profit, down from £8 million in 2018.

The company noted that House of Fraser’s collapse had “materially impacted” the business, resulting in Mulberry paying a £2.1 million write off.

“Although the group entered into an agreement with Sports Direct upon its acquisition of House of Fraser, the business continued to trade below previous levels,” it said.

The business also moved from a wholesale to concession model at John Lewis, accruing a further cost of £1.3 million.

Mulberry noted that its new concessions had performed better than expected and had allowed the company to recover a significant proportion of the lost revenue from the House of Fraser collapse.

“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,” said chief executive officer Thierry Andretta.

“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,” Andretta added.

Mulberry noted that in the 11 weeks to June 15 total sales were up 13 per cent. 

The results come as finance director Neil Ritchie prepares to leave the brand on June 30.

Ritchie joined the company in 2016 and will remain at his role until the end of the month, following the completion of the year-end audit process.

Click here to sign up to Retail Gazette‘s free daily email newsletter