13th Nov 2019 09:23
(Alliance News) - Fashion brand Mulberry Group PLC on Wednesday reported a widened first half loss on rising investment costs and a difficult UK retail market.
In the 26 weeks to September 28, the British fashion brand booked a pretax loss of GBP10.9 million, stretched from GBP8.2 million last year.
Revenue edged 0.9% higher year-on-year to GBP68.9 million from GBP68.3 million, with the international segment offsetting its struggling UK unit.
Mulberry said: "Results for the period were affected by the challenging UK retail environment and further investments made in developing the brand in international markets."
Underlying operating expenses, not including IFRS 16 costs and expenses incurred last year in relation to troubled UK department store House of Fraser, rose by 5.8% to GBP51.1 million from GBP48.3 million.
International sales rose by 12% to GBP24.2 million from GBP21.6 million last year. In the UK, sales were down by 4.3% to GBP44.7 million from GBP46.7 million last year.
The gross margin fell to 59.4% from 61.5% with Mulberry being forced to increase promotional activity to offset UK retail market headwinds.
Sales growth in South Korea and Japan has continued in the second half, Mulberry said, with sales in Asia generated double-digit growth.
Mulberry added: "The UK retail environment has remained challenging, as has been well documented."
Post-period end, the company has opened two UK pop-up stores in Canary Wharf, at the heart of the capital's financial district, and in Gatwick airport, the country's second largest behind London Heathrow.
Mulberry said: "During the second half of the financial year, the board expects Asia to continue to generate double digit sales growth and for International sales to increase as a proportion of overall group revenue.
"Against an uncertain backdrop in the UK and with the important Christmas period ahead, the board expects the group to trade profitably and to generate cash during the second half of the financial year."
Shares in Mulberry were 6.6% lower at 261.65 pence each in London on Wednesday morning.
By Eric Cunha; [email protected]
Copyright 2019 Alliance News Limited. All Rights Reserved.
Related Shares:
Mulberry Group