Mulberry reports full-year loss but upbeat on improving sales

Mulberry has reported a full-year pre-tax loss of 14.2 million pounds compared to a profit of 1 million pounds the year before but remained upbeat on strong e-commerce and Asia sales in current trading.

The British luxury label reported a 10 percent drop in full-year revenue to 149.3 million pounds, compared to 166.3 million pounds the year before, reflecting a “challenging period” in which Covid-19 forced mass store closures.

International retail sales for the year ended 28 March increased 4 percent to 32.4 million pounds, representing 26 percent of retail revenue. Asia Pacific retail sales increased 30 percent, “driven by ongoing investment in this region”. However, that was slightly offset by a 14 percent drop in rest of world retail sales, which included some store closures.

The company’s inventory decreased 12 percent to 34.9 million pounds in the period, “reflecting good progress with our agile supply chain and inventory control”.

The brand also said it’s decided not to pay a full year 2020 dividend “in order to maintain a robust liquidity position given the uncertainty and duration of Covid-19”.

Current trading shows improvement

The company said trading since the start of this financial period has been “ahead of our early expectations”, with an improving trend of revenue since stores reopened. Digital revenue at the label was up 69 percent, vehicle Asia Pacific revenue was up 27 percent.

The brand said it has net cash of 8 million pounds as of 25 September, with “bank facilities extended to March 2022 with renegotiated banking covenants to reflect the current Covid-19 world”.

“The group has made strategic and operational progress during the most challenging market conditions in the history of the brand. Prior to the impact of the Coronavirus pandemic we were performing well and on-track to record a pre-tax profit in the second half of the year,” CEO Thierry Andretta said in a statement.

“This was due to progressing our four-pillar growth strategy: our omni-channel distribution, our international development in Asia, a drive for constant innovation, and sustainability. The Group has been able to withstand some of the pressures that we, and indeed the entire retail industry, have been faced with.

“Post year end, the group has continued to benefit from its long-term strategic focus with initial sales ahead of our early expectations. However, we cannot escape the reality that British luxury and UK cities face a very uncertain future, hampered by necessary but dramatic social distancing measures and alarmingly low levels of footfall, as well as the pressures of high rents and business rates and the upcoming changes to tax free shopping.”

Photo credit: Mulberry