10th Dec 2015 08:58
LONDON (Alliance News) - Luxury handbag maker Mulberry Group PLC on Thursday said it swung to a small pretax profit in the first half as revenue increased, boosted by online sales, while total sales in the weeks since the end of the period continued to rise.
Mulberry said its pretax profit for the six months to the end of September was GBP100,000, compared to a GBP1.1 million loss a year earlier. Revenue increased to GBP67.8 million from GBP64.7 million, and the profit was further boosted by gross profit margin improving to 61.5% from 59.9%.
Mulberry said its sales in the UK were strong in the half, while international sales also increased thank to encouraging growth in Europe, though the North American market was more challenging. Wholesale orders declined 11%, however, mostly due to more conservative orders being placed by the group's partners in Asia, where the luxury goods market is struggling against weak economic conditions.
Digital sales increased 20% in the half, taking the total contribution to sales up to 12% from 10% a year before, while Mulberry also made efficiency gains in its UK factories, which helped boost margins.
Retail sales in the 10 weeks to December 5 grew 4.0%, the company said, while like-for-like sales growth hit 5.0%.
"Our strategy is beginning to deliver tangible results in line with our expectations. We look forward to Johnny Coca's first Mulberry collection which will emphasise our Britishness and our heritage in leather, whilst delivering great quality within our targeted price range," said Thierry Andretta, the chief executive of Mulberry.
"We are excited about the future and look forward to the Mulberry brand fulfilling its potential both in the UK and internationally," he added.
Shares in Mulberry were down 1.5% to 921.00 pence.
By Sam Unsted; [email protected]; @SamUAtAlliance
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