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Mulberry focuses on global and digital growth as UK sales fall

Luxury brand Mulberry swung to a loss in the 53 weeks to 30 March, as challenging conditions in the UK retail market impacted sales.

Overall revenue for the 12-month period was £166.3 million, which was down £3.4 million compared to the previous financial year, with UK sales dropping by 6%. It resulted in a reported loss before tax of £5 million compared to profit of £6.9 million last year.

Mulberry was one of the first brands to announce that the collapse and restructuring of wholesale partner House of Fraser at the end of 2018 would materially impact its annual performance. The bad debt and fixed asset write off of £2.1 million caused by the administration was confounded by continued poor trading through the department store chain's stores under the ownership of Sports Direct, according to Mulberry.

Digital growth and international expansion were bright points in the full-year trading report. Digital sales were up by 27% year on year and now represent 22% of overall group revenue, while international sales jumped by 7% thanks to opening in new territories.

During the period Mulberry opened on Albaba’s Tmall marketplace, as well as on the luxury eCommerce platform Secoo, as the brand increased its online presence in China.

Thierry Andretta, CEO of Mulberry, said results were in line with expectations, adding the company is making “good progress” advancing its international arm and direct-to-customer model.

“We have established new subsidiaries in Japan and South Korea and introduced important digital partnerships in China,” he explained.

“Looking ahead, we anticipate that international and digital sales will continue to grow whilst UK retail trading conditions are expected to remain uncertain. The group plans to invest further in its new Asian entities during this development phase, enhance its global digital platform and optimise the UK network."

Mulberry said that total retail sales are up by 13% for the 11 weeks to 15 June 2019, with international jumping by 31% and the UK showing signs of improvement with 7% growth. The brand has recently launched on European online luxury fashion marketplace Farfetch, and opened new store concepts in New York City and Dubai.

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