Mulberry is in discussions to raise over £20m in new funding as the luxury brand faces widening losses and a tough trading environment.

The retailer expects an underlying pre-tax loss of around £23m for the year ending March 29, up from a £22.6m loss the previous year. Revenues are forecast to fall 21% to approximately £120m.

The fundraising talks involve majority shareholder Challice, controlled by Singaporean entrepreneur Christina Ong and husband Ong Beng Seng, alongside major investor Mike Ashley’s Frasers Group.

The board said additional capital is needed to support Mulberry’s growth strategy and financial targets.

Chief executive Andrea Baldo, who joined Mulberry last September from Ganni, is overseeing a turnaround focused on rebuilding profitability and gross margin.

This includes cutting costs, restructuring the head office, and exiting unprofitable stores. Around 85 jobs were cut last year, primarily at the company’s headquarters.

“In the near term, we are firmly in turnaround mode,” Baldo said. “Following our year-end review, the board and I are confident that, with additional funding, we can accelerate momentum and deliver against our targets at pace.”

Mulberry is shifting focus away from China, closing 12 stores in Asia while planning to open new shops in UK cities.

The retailer aims to complete the fundraising by July, alongside publishing its annual results.

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