Mulberry swings to loss, cites 'challenging' UK market and HoF collapse

Luxury handbag maker Mulberry said on Wednesday that it swung to a full-year loss amid a "challenging" UK retail market and as it took a hit from the collapse of House of Fraser.

In the year to 30 March 2019, the company made a reported pre-tax loss of £5m versus a profit of £6.9m the year before as revenue ticked down to £166.3m from £169.7m. International revenue grew 7% to £51.7m, but UK revenue declined 6% to £114.6m.

Mulberry said the UK retail market was "challenging", with House of Fraser's entry into administration "materially" affecting revenue, in addition to the bad debt and fixed asset write-off of £2.1m.

"Although the group entered into an agreement with Sports Direct upon its acquisition of House of Fraser, the business continued to trade below previous levels," it said.

On a brighter note, revenue in the international business continued to grow thanks to expansion into Asia and the establishment of new subsidiaries in Japan, South Korea, China, Hong Kong and Taiwan, over the past three years.

Chief executive officer Thierry Andretta said: "The group has delivered results in line with expectations and is making good progress in advancing its International strategy and direct to customer model whilst managing a challenging UK market.

"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."

As far as current trading is concerned, Mulberry said retail total sales rose 13% in the 11 weeks to 15 June, with international sales up 31% and UK sales 7% higher.