Luxury handbag manufacturer announces losses of £12m
Losses at luxury handbag firm Mulberry widened to £12.3m the first six months of the year.
The Somerset luxury brand, announced unaudited results for the twenty-six weeks to the end of September.
Group revenue was up seven per cent to £69.7m from £64.9m but losses before tax widened from £2.8m to £12.3m.
The dip in profits included £3.3m of Software as a Service (SaaS) costs and the additional operational costs of our new stores in Sweden and Australia.
International retail sales increased 34 per cent to £23.5m supported by a strategy to bring in-house ownership of overseas stores including Sweden and Australia
At the same time revenue in the US increased by 38 per cent due to increased brand awareness.
Mulberry said the wider macro-economic environment and geo-political climate continues to present some uncertainty.
But the company said it is well positioned to navigate the current climate.
Chief executive Thierry Andretta said: “Against a challenging macro-economic backdrop, which is impacting the entire luxury landscape, we have continued to invest in our long-term future.
“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.
“As one of the most iconic British luxury brands, product innovation remains at the heart of Mulberry. Our recent product launches, the Islington, Pimlico and Lana have been well received by customers, which is testament to our heritage, fresh designs and modern craftsmanship.
“Looking ahead, we are well placed to capitalise on the important festive trading period and expect the usual second half weighting to trading.
“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 policy makers to collaborate with all industries campaigning on this issue and reconsider implementing this to support businesses across the UK.”