Mulberry sales tumble due to pandemic but online and Asia perform well
Mulberry sales dropped 29% to £48.9m in the half year to 26 September 2020 but the British luxury house said that it sales trajectory was improving and that online and Asia had performed well.
Digital sales were up 68% to £23.4m while Asia Pacific retail sales increased 28%, driven by its ongoing investment in region. Adjusted loss before tax was £1.9m (2019: £10.1m) as a result of the hit the company from the COVID-19 pandemic.
Mulberry said the trajectory of its sales had improved as the pandemic progressed with sales down 39% in Q1, when the pandemic was at its first peak, and down 18% in Q2. Trading in the 8 weeks to 21 November 2020 was down 19% relative to the same period last year, while sales online and in Asia both experience double-digit growth.
CEO Thierry Andretta said: "I am proud that in spite of the devastating effects of the global pandemic, we have made further progress on our long-term strategy to build Mulberry as a sustainable global luxury brand. This is focused around: a truly omni-channel network and market leading digital platform, increased presence in Asia, and a relentless focus on innovation and sustainability, offering our customers beautiful products, made to last in our Somerset factories.
"This strategy enabled us to withstand some of the pressures that we, and indeed the wider retail and hospitality sectors, have been faced with. In particular, using our market leading global digital network to replace retail sales with digital wherever possible, achieving high growth in China and Korea, and reacting quickly to flex our agile supply chain, enhancing market reactivity and reducing lead time, to match the increase in digital demand.
"In spite of all of these self-help measures, we cannot avoid the fact that the damage the coronavirus has caused to business, decimating high streets and the tourism industry, is severe. For this reason, in order to ensure that the business was able to navigate through this difficult time, we took the painful decision to implement a far-reaching cost reduction and optimisation programme.
"As we look to the future, we remain confident in our strategy and in the relevance and durability of the Mulberry brand. There are of course many obstacles ahead, not least the upcoming changes to tax-free shopping in the UK that could hamper the wider retail and economic recovery, but we are grateful to be able to open our doors again in England on 2 December and to be able to trade across all our platforms in this crucial Christmas trading period. I would like to take this opportunity to thank my colleagues for their resilience, their hard work and their dedication to Mulberry."
Frasers Group, led by retail tycoon Mike Ashley, recently upped its stake in Mulberry to 36.8% crossing the threshold at which it would be required to make an offer for the entire business. However since Mulberry already has a majority shareholder – Challice the investment vehicle for Singapore’s Ong Family, owns around 56% of the business – it is not obliged to make a bid but must inform the Stock Market of its intentions by 17 December.
