Nov 30, 2022
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Mulberry H1 sales dip, CEO begs for tax-free tourist shopping U-turn

Nov 30, 2022

Luxury accessories brand Mulberry reported its results for the 26 weeks up to 1 October on Wednesday and seemed upbeat, calling the performance “resilient”, despite a small sales dip and a swing to a pre-tax loss.


Group revenue during the period was down 1% at £64.9 million with UK retail sales “impacted by the broader economic environment” and falling 10% to £34.1 million. 

Those figures aren't surprising set against the current economic backdrop, but it is perhaps surprising that Chinese retail sales increased 6%, despite Covid-19 restrictions. This contributed to the 1% increase in Asia Pacific retail sales to £11.9 million.

International retail sales overall remained broadly flat at £17.5 million. 

The company also said that digital revenue fell 15% to £16.3 million as shoppers continued returning to physical spaces. Unfortunately, revenue through stores was also down, although by a lower 3%, at £35.3 million. That added up to an overall retail sales fall of 7%. However, franchise and wholesale revenue was up a massive 32% at £13.3 million.

The gross margin of 71% was up from 69% and was “achieved due to a continued strategic focus on full-price sales and increased volume efficiencies”.

But the company made a pre-tax loss of £3.8 million, following a profit on the same basis of £10.2 million a year ago. The change reflected, one-off items and additional investment in the group. In the previous year, it had benefited from £2 million in business rates relief and a one-off profit of £5.7 million on the disposal of its Paris lease.

CEO Thierry Andretta said of all this: “We have delivered a resilient performance, supported by strong international demand and continued investment in the UK.

“Mulberry has a distinct brand identity, combining British heritage with innovative products and modern craft. What helps set us apart is our commitment to sustainability.

“Looking ahead, we are confident in our ability to execute our strategy and to continue to invest across the group. We are well placed for the festive trading period and will continue to drive the business forward to the benefit of all stakeholders.”

But he also made a plea for the return of tax-free shopping for tourists, saying shoppers were shunning London in favour of European destinations.

He added that up to half of Mulberry's Bond Street flagship’s sales used to come from international tourists, but that’s now less than 5%.


Despite that major blow, his wider confidence doesn’t seem misplaced given that the business has seen an “improved trend in retail revenue” for the eight weeks to 26 November. The gross margin in the second half is also running at the same level as the improved margin in the first half, and the company has opened a new store at the Battersea Power Station mall. 

Developments in the first half also set it up well for H2 with the firm continuing its focus on building its direct-to-customer model via the acquisition of five stores in Australia. And it launched Mulberry Sweden with the acquisition of three stores previously operated by its Swedish franchisee.
Its digital sales in the half may have fallen, but they still accounted for 25% of total group revenue, not a huge drop from 29% as UK customers continued to return to a physical shopping experience. And international growth was also supported by the launch of digital platforms in South Korea, which bodes well for future development.

The company said it’s “well prepared for the important festive trading season and the usual second-half weighting to trading”. However, it added that “there remains ongoing uncertainty in the economic and geopolitical environment”.

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