Mulberry warns profits will be 'significantly below expectations'

clock

UK retailer Mulberry has issued a profit warning after a "greater than anticipated" decline in wholesale sales.

Revenues for the first half of the year were down 17% at £64.7m, compared to £78.1m in the first half of 2013. The firm expects the slump in wholesale sales to continue for the remainder of the year, before improving during 2015-16.

In a trading statement issued today, it said: "Profit before tax for the full year to March 2015 is expected to be significantly below current expectations."

Wholesale sales plummeted during its first half by 31%, to £19.6m. Mulberry blamed the decline on a combination of inventory reduction and conservative ordering by its Asian and European franchise partners.

The retail business fell by 9% to £45.1m. UK full price sales fell more sharply, by 12%, to £20.9m. A decline in the number of shoppers, particularly tourists, has caused the fall, Mulberry suggested.

Mulberry executive chairman Godfrey Davis said he has been reinforcing the product ranges to combat the decline: "As expected, the first half has been difficult, but the group remains profitable and cash generative, giving us the resources to invest for the future.

"Despite the current challenges, I remain confident that we will build on Mulberry's solid foundations and unique brand positioning in the luxury market to restore growth in the medium term."

More on Investment

Stories of the Week: UK wage growth cools less than expected; Reeves planning pension 'megafunds'; US inflation rises

Stories of the Week: UK wage growth cools less than expected; Reeves planning pension 'megafunds'; US inflation rises

Wage growth, pension 'megafunds' and US inflation: The biggest stories from the world of investment and asset management this week

clock 15 November 2024 • 1 min read
Partner Insight:  Bonds look as attractive as ever. Being nimble will be key

Partner Insight: Bonds look as attractive as ever. Being nimble will be key

Aegon Asset Management
clock 13 November 2024 • 2 min read
Partner Insight: Niches - Searching for roads less travelled

Partner Insight: Niches - Searching for roads less travelled

In this article, Richard Perrott from the MSIM’s International Equity Team, explains the team’s approach to finding potential investment opportunities within unexpected areas.

Richard Perrott, Executive Director International Equity Team @ MSIM
clock 12 November 2024 • 4 min read
Trustpilot