Mulberry posts deeper half year loss, shares down

Mulberry shares (LON:MUL) dropped on Wednesday after it posted a deeper loss in its half year results.

Shares in the luxury fashion brand were down over 5% during Tuesday morning trading.

For the 26 weeks ended 28 September, loss before tax amounted to £9.9 million, deeper than the £8.2 million loss made in the first half of 2018.

Mulberry blamed “further investment costs and the effect of a challenging UK market” for the deeper loss.

Indeed, the gloomy trading environment to hit UK retail has been well publicised by many businesses struggling as of late.

At the start of the month, the child care retailer Mothercare (LON:MTC) announced that its UK business was on the edge of collapse.

With the UK’s departure deadline from the European Union extended yet again, both economic and political uncertainty prevails.

Mulberry added that revenue amounted to £68.9 million for the period, with with International up 12% and UK down 4%.

Despite the uncertain UK backdrop, the company said that it expects to “trade profitably and to generate cash” as it enters the Christmas period in the second half of the year.

“We have made further progress with our strategy through continued investment in a direct to customer, International, Digital and omni-channel model,” Thierry Andretta, Chief Executive Officer, commented on the results.

“We are seeing the benefit of recent initiatives in Asia which remains a significant growth opportunity.  This will support our ambition for International to become a greater proportion of Group revenue,” the Chief Executive Officer continued.

“As part of our approach to sustainability, we are progressing the use of recycled materials and sourcing 65% of our leathers from environmentally certified tanneries while maintaining an accessible luxury price positioning.”

“Looking forward, we will continue to build Mulberry as a global luxury brand with a strong focus on sustainability and innovative product, appealing to both our existing customers and new audiences.”

Shares in Mulberry Group plc (LON:MUL) were trading at -6.55% as of 08:32 GMT Wednesday.