The posh purse maker Mulberry has blamed robust excessive road circumstances and the collapse of Home of Fraser for widening first half losses.
The corporate, finest identified for its Bayswater and Alexa baggage, slumped to a loss earlier than tax of £8.2m within the six months to 30 September, in contrast with £600,000 a yr in the past, because the failure of Home of Fraser worn out greater than £2m of revenue. General gross sales fell 8% to £68.3m regardless of a robust displaying abroad.
“The group’s UK enterprise stays worthwhile though gross sales have been affected by the Home of Fraser administration, softer UK demand and decrease vacationer footfall,” mentioned its chief govt, Thierry Andretta. He mentioned a shift in timing of a key sale interval had additionally affected takings.
Gross sales at UK shops have been down 11% for the half yr. Buying and selling has continued to endure since then with gross sales at retailers open a couple of yr, excluding Home of Fraser, operating 7% down over the past six weeks.
However Andretta mentioned that he didn’t imagine there was an issue with Mulberry’s product or technique.
“We’re constructive regardless of a difficult six months,” he mentioned.
The UK market accounts for almost 70% of Mulberry gross sales and the corporate had already advised traders it might endure a success on the again of Home of Fraser’s administration. The division retailer chain’s new proprietor Mike Ashley’s Sports activities Direct will not be obliged to pay the near-£1bn owed to collectors on the time of its collapse and to date solely 22 of its 59 shops have been formally saved.
The Home of Fraser collapse resulted in a nasty debt and asset write-off of £2.1m at Mulberry with gross sales within the concessions and through the division retailer’s web site “materially decrease” through the interval.
From mid August, when the division retailer fell into administration, to the tip of September, Mulberry’s gross sales through Home of Fraser halved to £1m from £2m in the identical interval a yr earlier than. The drop is partly the results of the closure of three concessions within the division retailer chain, the place Mulberry nonetheless has 17 shops.
Mulberry wished to proceed working with Home of Fraser however, Andretta mentioned, “It’s not in our palms, we have to know what they may do.”
Mulberry, the UK’s greatest producer of leather-based items, has struck a brand new deal to open concessions in John Lewis shops, which it beforehand handled as a wholesale buyer, because it seeks to rebuild its UK division retailer enterprise. Mulberry has 18 concessions in John Lewis below the brand new deal and might be distributing a a lot wider vary of products through the division retailer’s web site. Andretta mentioned Mulberry would possibly prolong the connection relying on how issues developed with Home of Fraser.
“In some cities we might want to decide however it isn’t out of 1 or into the opposite. Our final aim is to provide finest in school service for the posh buyer within the UK.”
The take care of John Lewis will lead to a £1.4m cost to Mulberry within the second half after it purchased again inventory from the division retailer forward of the transfer.