Losses shrink at Mulberry amid early progress in turnaround

Luxury fashion firm Mulberry has slashed its losses by more than half amid its major turnaround efforts.

The handbag maker said it is “well set” for the key Christmas trading period as it also reported a slowdown in sales decline, benefiting from growth in its wholesale business.

Boss Andrea Baldo said it saw an “encouraging first half” despite wider inflationary pressures in the sector.

“We’re still early in the turnaround, but the foundations we’ve put in place are working, and we’re starting to see that reflected in performance,” he said.

The group has been pushing forward with a major overhaul programme, which saw the group cut costs sharply and axe around 85 jobs late last year to help improve its performance.

Mulberry also raised £20 million in June to help support its transformation after reporting a 21% slump in revenues last year.

On Wednesday, Mulberry told shareholders that group revenues declined by 4% to £53.9 million for the half-year to September 27, compared with a year earlier.

The retail business benefited from a “strong reaction” in its wholesale arm, where revenues jumped 36%.

Meanwhile, total retail sales slid by 8%, with a like-for-like drop of 2%. This was buoyed by 4% like-for-like growth across stores.

In the UK, retail sales slipped 10% to £28.1 million as store sales dropped 7%.

Asia Pacific revenues also dropped 17% year-on-year due to weaker demand in stores as well as a number of closures.

The group revealed a pre-tax loss of £6.9 million for the half-year, shrinking from a £15.7 million loss a year earlier.

Mr Baldo added: “While we remain mindful of the wider trading environment, current momentum gives us confidence as we enter the key festive trading period.

“We’re focused on maintaining this progress and continuing to build a stronger, resilient business for the long term.”