Mulberry is to invest £20mn capital raised from existing shareholders in its growth strategy.
News of the fundraising from shareholders Challice and Frasers Group came as the upmarket leather goods brand reported a fall in revenues and a narrowing of pre-tax losses. Mulberry reported pre-tax losses of £31.8mn – down from a £34.1mn loss last year – on revenues of £120.4mn (-21%). Within that, UK and digital revenue fell by 20%.
Mulberry pointed to a year in which the global luxury market contracted, and said UK performance was affected by macro-economic conditions, uncertainty and inflationary pressures.
Andrea Baldo, Mulberry chief executive, said: “With our strategy clearly defined and delivering the expected results, we received a further demonstration of the support from our shareholders. We welcome the additional capital injection from both our major shareholders, which will enable us to keep moving with pace – investing in product, digital, and international growth to deliver long-term value.”
Growth strategy
Mulberry unveiled its new ‘Back to the Mulberry Spirit’ strategy in January. This emphasises a return to profitability through simplification, brand alignment and and engaging with customers. Medium-term, the retailer is targeting annual revenues of £200mn and 15% profit margins.
Steps to that end include right sizing its store network, with a focus on the US and UK, international expansion through retail partnerships with Nordstrom in the US and David Jones in Australia and a refocus on the product range.
Baldo said: “We have made significant progress in laying the foundations for Mulberry’s turnaround. Since launching our ‘Back to the Mulberry Spirit’ strategy in January, we have acted at pace to simplify the business, reduce costs, and refocus on our most profitable channels and markets. This is an ambitious transformation, underpinned by operational discipline and a commitment to placing creativity at the heart of everything we do.
“At the same time, we are reinvigorating the brand to reassert its cultural relevance and emotional resonance with customers. The launch of our new campaign, ‘A Return to Somerset’, marks an important milestone, celebrating our roots, values and the distinct British voice that defines Mulberry.”
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