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Mulberry reports losses but says digital investment is helping it turn around

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Mulberry today reported falling turnover and pre-tax losses of £1.1m in the first half of its financial year – but said investment in digital was paying off with online and offline growth in the first nine weeks of the second half.

Total revenue fell by 17% to £64.7m in the six months to September 30 from £78.1m over the same period last year. Retail revenue fell by 9% to £45.1m, compared to last year, while wholesale revenue was down by 31% to £19.6m. Online sales rose by 1% to £6.6m in the first half, representing 10% of group sales, up from 8% last year. When the effect of online sales was removed from retail revenue, sales were down by 16% to £31m thanks to a dropping off of store visits, especially from tourists.

Pre-tax losses came in at £1.1m, from a profit of £7.2m at the same time last year.

The company pointed to growth in the nine weeks to November 29, in which online sales grew by 18% and total retail sales by 8%, but said trading through Christmas and into the New Year would be important to the full-year result.

Chairman Godfrey Davis said the figures for the nine weeks were “encouraging”.

He said: “We have worked hard to re-engage with our customers and our tongue-in-cheek Christmas video #WinChristmas has been viewed well over one million times.

“After a difficult couple of years the steps that have been taken to return Mulberry to growth are beginning to bear fruit.” He said the company expected to gain further momentum after appointing Johnny Coca as its new creative director.

Mulberry put the fast online growth of the first nine weeks of the second half down to its investment in digital over the last two years. During the first half the company invested in omnichannel, implementing the first phase of a project to introduce in-store online ordering, click and collect and in-store online returns. Omnichannel services, it said, would continue to be improved progressively. It also focused on digital marketing, including its Christmas video, #WinChristmas, which it said was an example of how it was marketing the brand in a cost effective and “uniquely British way.”

The company also introduced a new EPOS system in stores to control inventory better and to support its new customer relationship management systems. Other highlights included international expansion, with new stores opened in Las Vegas and Hamburg and partner stores in Bangkok and Dubai. The closure of five other partner stores brought its global store numbers, as at September 30, to 120. The company says it will now slow store openings while it concentrates on performance at the 20 international stores opened in the last three years.

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