Mulberry, the British luxury brand, is making strategic financial moves following significant losses.
- Mulberry reported a loss before tax of £34.1m for the 52-week period, a stark contrast to last year’s profit.
- Group revenue decreased by 4% due to challenging market conditions, with notable downturns in the UK and Asia Pacific.
- International retail sales saw a rise, especially in Sweden, the US, Australia, and New Zealand.
- New leadership under CEO Andrea Baldo is pushing for strategies aimed at recovery and growth.
Mulberry, a renowned British luxury brand, has announced plans to raise over £10m through the issuance of new ordinary shares. This financial maneuver comes in the wake of the company’s recent financial statements, which revealed a significant swing to a loss totaling £34.1m before tax for the year ending 30 March 2024. In comparison to the previous year’s profit of £13.2m, this marks a substantial decline.
The underlying loss before tax amounted to £22.6m, a stark reversal from a profit of £2.5m reported in the preceding year. Contributing to these figures was a 4% decrease in group revenue, recorded at £152.8m, influenced largely by what was described as a “challenging” second half. Specifically, retail sales were down 3.4% in the UK, and a 4.2% decrease was observed in the Asia Pacific region. Despite these setbacks, Mulberry’s international retail endeavors yielded an 8% increase in total sales, particularly in markets such as Sweden, the US, Australia, and New Zealand.
As the company steps into fiscal 2025, it continues to face difficulties. In the first 25 weeks, group and retail revenue experienced respective declines of 18% and 14% year-on-year, while debt facilities increased, reaching up to £27.5m. To fortify its financial position, Mulberry has embarked on a plan to issue new ordinary shares amounting to £10m and is set to launch a retail offer projected to raise an additional £0.75m from existing shareholders.
Since taking the helm on 1 September, Andrea Baldo, the newly appointed CEO, has focused on swift, strategic initiatives. Baldo is steering the company towards enhanced operational efficiency while developing targeted strategies in product, pricing, and distribution to recapture market share, particularly within the UK.
Drawing attention to macro-economic challenges faced by the luxury sector, Chairman Chris Roberts emphasized the difficulties posed by a tightening of consumer spending across global markets. He expressed confidence that the strategic changes, combined with the leadership of a new CEO and newly secured financial backing, would stabilize Mulberry, positioning it for future growth.
Mulberry’s strategic financial initiatives and leadership changes are aimed at recovering from recent losses and securing future growth.
