LONDON – British handbag maker Mulberry is seeing encouraging signs for an eventual rebound as it reported on Wednesday unaudited results for the 26 weeks ending Sept. 27.
Group revenue in the period was down 4 percent to 53.9 million pounds, but wholesale saw a 36 percent uptick. The brand recently signed new wholesale agreements in the U.K. with key partners, including John Lewis, Liberty, and Harvey Nichols, and launched a new retail incentive scheme to improve performance.
These improvements reflected actions taken as part of the company’s turnaround strategy, “Back to the Mulberry Spirit,” first unveiled in January by the current chief executive officer, Andrea Baldo.
The strategy aims to restore Mulberry to the “culturally relevant British lifestyle brand” it once was.
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“This has been an encouraging first half,” commented Baldo on the results.
“We’re still early in the turnaround, but the foundations we’ve put in place are working, and we’re starting to see that reflected in performance. We’re strengthening our margin and improved our cash position through a greater focus on full-price sales and disciplined cost management, while our refreshed product offer and creative direction are reconnecting the brand with customers,” he said.
Baldo added that the market has responded positively to new styles: Hackney and Roxanne. The latter was prominently featured in a recent campaign featuring “Wicked” star Cynthia Erivo.
“While we remain mindful of the wider trading environment, current momentum gives us confidence as we enter the key festive trading period. We’re focused on maintaining this progress and continuing to build a stronger, resilient business for the long term,” Baldo continued.
Overall retail and digital revenue dropped 2 percent in the period, but both full price and off price in retail stores in the U.K., Europe, and the U.S. logged a 4 percent increase.
Asia Pacific continued to underperform, with revenue down 17 percent in the period compared to last year. It was driven by a 14 percent like-for-like decline in stores, closing six, as the strategy of structure simplification continued.
Gross margin improved from 67 percent last year to 69 percent in the period by maintaining a full price, non-discounted offering in retail and digital. Total operating expenses decreased 16 percent to 42.7 million pounds year-over-year in the period.
Group loss before tax improved significantly in the period, standing at 7.4 million pounds, compared to 15.3 million pounds a year ago.
The company said it is on path toward sustainable profit and cash generation, unlocked through the 20 million pound fundraise from two of its largest shareholders: Challice Ltd., which belongs to the Singaporean billionaires Christina Ong and Ong Beng Seng, and the substantial minority shareholder Frasers Group.
