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COVID-19 intensifies Mulberry's losses

Oct 16, 2020 United Kingdom
COVID-19 intensifies Mulberry's losses
The UK-based handbag and accessories retailer has been hit particularly hard by COVID-19. When announcing last year's results, Mulberry confirmed a 10% decline in revenue
"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. 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 I am extremely proud of my colleagues, who have coped admirably with these challenges. I am pleased to say the group reacted swiftly to the impact of COVID-19, managing capital and reducing costs to ensure that we were able to maintain a robust liquidity position. 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. We cannot control external events, but we have a clear strategy and remain confident in the strength of the Mulberry brand. I would like to take this opportunity to once more thank my colleagues for their hardwork, resilience and dedication during these difficult times", commented Thierry Andretta, Chief Executive Officer.

In its preliminary results for the 52 weeks ended on the 28th of March 2020, Mulberry announced group’s revenue down by 10% to 149.3 million British Pounds (166.3 million British Pounds in 2019), primarily reflecting a challenging UK market and the impact of COVID-19 towards the end of the financial period. Group revenue was down by 6% before the start of COVID-19.

International retail sales increased by 4% to 32.4 million British Pounds (31.3 million British Pounds in 2019) representing 26% of retail revenue (23% in 2009). Asia Pacific retail sales increased by 30%, driven by ongoing investment in this region offset by a 14% decrease in rest of world retail sales, which included some store closures.

Adjusted loss before tax of 14.2 million British Pounds (2019: adjusted profit 1.0 million British Pounds) before adjusting items of 33.7 million British Pounds (2019: 6.0 million British Pounds) largely resulting from the expected impact of COVID-19 on future trading.

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