Mulberry revenue falls 29% as lockdown hits sales

Mulberry has reported a 29% decline in revenue to £48.9m during the first half of the year, as the impact of the coronavirus pandemic impacted its sales.

For the 26 weeks ending 26 September 2020, the retailer also revealed an adjusted loss before tax of £1.9m (2019: £10.1m) before adjusting items of £0.5m (2019: £nil) which it said reflected “actions taken in response to COVID-19, strong growth in Asian markets and strength of digital business”.

As lockdown impacted its physical stores, digital sales increased 68% to £23.4m (2019: £13.9m) however, with digital sales now representing 67% of group revenue in Q1 and 32% in Q2.

It added that sales trends experienced in Q2 continued into October, with improving stores sales, as well as a “strong” digital performance and continuing growth in Asia.

CEO Thierry Andretta said he was “proud” that in spite of the “devastating effects” of the pandemic, the company has progressed on its long-term strategy to build Mulberry as a sustainable global luxury brand.

He said: “This strategy enabled us to withstand some of the pressures that we, and indeed the wider retail and hospitality sectors, have been faced with.

“In particular, using our market leading global digital network to replace retail sales with digital wherever possible, achieving high growth in China and Korea, and reacting quickly to flex our agile supply chain, enhancing market reactivity and reducing lead time, to match the increase in digital demand.”

He added: “In spite of all of these self-help measures, we cannot avoid the fact that the damage the coronavirus has caused to business, decimating high streets and the tourism industry, is severe. For this reason, in order to ensure that the business was able to navigate through this difficult time, we took the painful decision to implement a far-reaching cost reduction and optimisation programme.

“As we look to the future, we remain confident in our strategy and in the relevance and durability of the Mulberry brand. There are of course many obstacles ahead, not least the upcoming changes to tax-free shopping in the UK that could hamper the wider retail and economic recovery, but we are grateful to be able to open our doors again in England on 2 December and to be able to trade across all our platforms in this crucial Christmas trading period.”