26th Nov 2020 10:11
(Alliance News) -Â Mulberry Group PLC on Thursday flagged its online performance as the pandemic dented store sales in the first half of its financial year, while cost savings resulted in a slimmed interim loss.
Revenue for the half-year to September 26 fell 29% to GBP48.9 million from GBP68.9 million a year before.
However, Mulberry's pretax loss slimmed to GBP2.4 million from GBP10.1 million year-on-year, helped as other operating expenses reduced 31% to GBP33.8 million from GBP49.2 million. The firm said it implemented "a number" of cost saving measures during the period.
The British luxury fashion brand - in which Mike Ashley's Frasers Group PLC recently bumped up its stake to just under 37% - blamed the sales fall on Covid-19 and the closure of its stores at the beginning of the period.
The strength of its online business helped to offset the shuttered stores, Mulberry said, with digital sales up 68% to GBP23.4 million. Digital sales represented 67% of group revenue in first quarter - versus 23% a year ago - and 32% in the second quarter, against 17% a year prior.
Sales trajectory has been improving, the firm noted, with sales down 39% in the first quarter and falling a more moderate 18% in the second quarter. The trends seen in the second quarter have continued in to October, with improving store sales, a strong digital performance and growth in Asia - after posting a 28% increase in Asia Pacific retail sales in the first half.
"However, our stores in England are currently closed following the commencement of a second national lockdown on 5 November 2020, which is expected to run until 2 December 2020. As with the initial lockdown period, the negative impact on store sales is being mitigated to an extent by the strength of our omni-channel business and growth in our Asia markets," said Mulberry.
Sales in the eight weeks to November 21 were down 19% year-on-year.
Mulberry said Covid-19 is likely to continue to dent trading for "at least" the remainder of the current financial year. As previously stated, sales are expected to be lower than the 2020 financial year, but the group "expects losses to be reduced".
"Our expectations will undoubtedly be negatively affected by any further countrywide lock downs or a "second wave" of Covid-19. We remain confident in the strength of the Mulberry brand and our strategy over the longer term," said Mulberry.
Shares in Mulberry were up 1.6% at 258.00 pence in London on Thursday.
By Lucy Heming;Â [email protected]
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