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The British premium leather bags manufacturer has reported a loss before tax of -£8.2 million (-US$10.67 million) in the six months ending September 30, attributed to critical conditions on the UK’s high street.
Mulberry says its business in the UK remains profitable but it has been impacted by the widening losses of House of Fraser, a major British department store chain, weak consumer demand and a lower tourist footfall. Sales in the UK market, which accounts for 72% of the brand’s total revenue, were down -11% in the six months to September 30, while international retail sales rose +13%. The Company’s pre-tax loss amounted to £8.2 million (US$10.67 million) compared with a £609,000 (US$792,874) loss a year ago, mainly impacted by a one-off £2.1 million (US$2.73 million) cost related to the collapse of House of Fraser, in which Mulberry operated 21 concessions, and a £2.5 million (US$3.25 million) cost related to the brand's launch in South Korea.
Mulberry expects the international channel to continue to increase as a proportion of sales and plans continued investment following the creation of the three Asia subsidiaries since March 2018. The British brand has set up new digital partnerships in China with Toplife, Secoo and VIP.com and expects “further enhancements” to be introduced in the omni-channel.
The Group says it remains committed to “Made in England”, with 50% of the of the handbags produced in the UK. “The UK manufacturing remains a point of distinction in the Group’s product offering”, says Mulberry. The leather bags category accounts for 71% Mulberry’s total revenue by product, accessories and small leather items 20% and lifestyles categories, which includes luggage and footwear, 9%.