The company's gross profit was £37.3 million (~$46.71 million), down 24 percent from £49.1 million in the same period last year. Gross margin fell to 67 percent (down from 70 percent in 2023), primarily due to stock optimization to manage inventory and working capital levels. Operating expenses decreased 16 percent to £50.7 million pounds compared to £60.0 million pounds in 2023, as measures were taken to manage the cost base, Mulberry said in a press release.
Mulberry Group plc reported revenue of £56.1 million (~$70.3 million) for the first half of FY24, down 19 percent year-on-year. Gross profit fell 24 percent to £37.3 million (~$46.71 million), with a reduced gross margin of 67 percent. UK retail sales fell 14 percent, while international sales fell 17 percent. CEO Andrea Baldo outlined plans to revitalize the brand and increase relevance.
The company's underlying pre-tax loss was £15.3 million versus £12.3 million in the first half of 2023 due to lower revenue and margin partially offset by lower operating costs. The reported pre-tax loss was £15.7 million (up from £12.8 million in H1 2023).
The company's digital performance continues to be strong, with sales representing 33 percent of group revenue compared to 29 percent in 2023, the statement added.
UK retail sales decreased 14 per cent to £31.3 million in the first half of 2024 compared to £36.2 million in 2023. Full price sales in the UK decreased 13 per cent to £ 24.3 million (2023: £27.9 million) with the total price mix unchanged at 77 per cent (2023: 77 per cent). Sales in UK stores were down 17 per cent on the previous period; however, the average transaction value increased by 9 percent. Digital sales in the UK were down 8 percent from the previous period; However, the average transaction value increased by 1 percent compared to the previous period and represented 38 percent of total UK retail sales (2023: 35 percent).
Total international retail sales decreased 17 per cent to £19.5 million in the first half of 2024 (2023: £23.5 million), with a partial reduction in Asia Pacific.
Asia Pacific retail sales decreased 31 per cent to £9.3 million in the period under review (down from £13.5 million in 2023). China and Korea experienced the biggest declines, at 52 percent and 29 percent respectively, with the challenging economic environment and reduced footfall affecting all markets.
Retail revenue from the rest of the world (RoW), which includes Europe and the United States, rose 2 percent. Store sales in Ireland increased by 8 per cent thanks to Brown Thomas, which has become a retail concession, having previously been classified as a wholesaler. Retail sales in Italy increased by 51 percent.
Wholesale and franchise sales decreased by 46 percent, with declines in all countries, as wholesale and franchise partners placed lower orders due to macroeconomic conditions, particularly in Italy and Denmark.
The net increase in cash and cash equivalents of £1.7 million included a drawdown of £2.5 million from the Group's revolving credit facility (RCF) and the drawdown of £1.3 million from a new financing facility supplier business shown within net loan income.
As a result of the financial performance in the period, there was an operating cash outflow of £7.0 million (2023: outflow of £8.0 million). This cash outflow has been offset by a decrease in net working capital which saw a cash profit of £15.7 million driven largely by the reduction in inventories of £20.2 million. due to the stock optimization program.
During the 26-week period, the company continued to invest, including £1.9 million (2023: £5.3 million) of capital expenditure and £0.8 million (2023: £3.3 million) of SaaS costs shown within operating costs. This spend supports investment in our omnichannel distribution and international development, including upgrading our warehouse management systems and our business planning tool; however, taking into account the trading during the period in which the level of investment has been managed.
“Although I have only been CEO for less than three months, the first half results illustrate the clear need to change priorities and rebuild the business. Mulberry is an iconic brand. It stands out for its rich heritage and craftsmanship, qualities that our customers deeply recognized and valued. Combined with our unique position in the market, offering responsible luxury products of unrivaled quality and longevity, made in our Somerset factories, Mulberry is truly unique. We are now working on initiatives to renew the product's relevance. of the brand, initially for UK consumers and then for our international audience.” said Andrea Baldo, Chief Executive Officer (CEO) of Murlberry.
Fiber2Fashion News Desk (SG)
