Mulberry reports ‘deteriorated’ economic climate as loss widens
The luxury retailer said that extra costs had offset an increase in revenue in the six months to the end of September.
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Your support makes all the difference.Retailer Mulberry said that the economic climate had “deteriorated”, making customers more cautious in their spending and reported a widening of its loss.
Pre-tax loss rose from £3.8 million in the first half of last year to £12.8 million in the six months to the end of September.
The increased loss came despite a rise in revenue, by as much as 38% in the US, though a much narrower 6% in the UK. Across the group, revenue increased by 7% to £69.7 million.
The company said that its losses were partly due to a large jump in some of its software costs, and the money it has to spend to operate new shops in Sweden and Australia.
There is no doubt, however, that the macro-economic environment has deteriorated, and this has had a knock-on effect on consumer sentiment
“Against a challenging macro-economic backdrop, which is impacting the entire luxury landscape, we have continued to invest in our long-term future,” said chief executive Thierry Andretta.
“Our strategy to transform our international businesses to a direct-to-consumer model has enabled us to control the entire customer experience in Sweden, Australia, New Zealand and Japan.
“Our investments in the period in our digital systems, stores and product will power future growth.”
The company said that it had launched several new ranges. The Lana and Pimlico bags were “performing well,” it said.
Shares rose 3% on Thursday morning.
“Looking ahead, we are well placed to capitalise on the important festive trading period and expect the usual second half weighting to trading,” Mr Andretta said.
“There is no doubt, however, that the macro-economic environment has deteriorated, and this has had a knock-on effect on consumer sentiment.
“At Mulberry, we have ensured that we are prepared to navigate this tricky environment, and we are confident in our ability to continue to execute our strategy.
“I continue to believe that offering VAT-free shopping in the UK would be one of the most effective ways to encourage business growth in this country.
“The fact this has not been reinstated is creating challenges for all sectors; impacting not only the luxury players, but also hospitality, travel and tourism.
“As we look ahead to the New Year, I urge policymakers to collaborate with all industries campaigning on this issue and reconsider implementing this to support businesses across the UK.”