20th Jun 2025 14:29
(Alliance News) - Mulberry Group PLC on Friday said it has taken steps to reduce its cost base as it hailed "progress" regarding its strategy which included exiting unprofitable stores.
The Somerset, England-based luxury handbag maker said it expects to report revenue of around GBP120 million for the financial year ended March 29, down 21% from GBP152.8 million in financial 2024.
Further, it expects an underlying pretax loss of GBP23 million for financial 2025, similar to GBP22.6 million in financial 2024.
Mulberry said trading in the first 11 weeks of the new financial year has been in line with its own expectations. The firm does not expect material overall revenue growth for financial 2026.
It added that it has taken action to cut its cost base, identifying and implementing around GBP5.9 million of annualised gross cost savings and establishing a lower and more sustainable cost structure for the future.
Chief Executive Officer Andrea Baldo said: "We've refreshed the executive team, aligned talent to our revised strategy, and launched a new brand campaign to drive customer engagement. Operationally, we've enhanced customer service through a new incentive model linked to in-store conversion, improved relationships with our supply chain partners and built a robust wholesale pipeline for financial 2026. Alongside this, we've taken action to reduce costs - restructuring head office and exiting unprofitable stores - delivering a lower run-rate cost base into FY26."
Further, the company said it is making progress regarding its strategy. This includes changes in key personnel at senior management level and new wholesale agreements in the UK with "premium" department stores.
Finally, Mulberry announced it intends to raise GBP20 million to help fund its growth strategy. It has requested HSBC UK Bank PLC to relax the minimum liquidity covenant contained within the facilities agreement for an agreed period through to the completion of the fundraising, expected in July.
The relaxation of this covenant will release about GBP6.5 million in short-term liquidity to Mulberry.
Separately, an affiliate of Mulberry's majority shareholder Challice Ltd has entered into a cash backed guaranteed of GBP6.5 million directly with HSBC, matching the increased covenant headroom.
Mulberry shares were down 11% to 100.00 pence each on Friday afternoon in London.
By Tom Budszus, Alliance News slot editor
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