Retail and digital (omnichannel) revenue decreased 8 per cent to £46.6 million, and overall comparable retail and digital revenue decreased 2 per cent. Within retail stores, comparable revenue at both full price and reduced price increased 4 percent in the key markets of the UK, Europe and the US, with positive momentum built from the second quarter.
Mulberry has narrowed its first-half loss as revenue fell 4 percent to £53.9 million (~$70.61 million), but gross margin rose to 69.2 percent due to reduced discounts. Retail and digital revenue fell 8 percent, while wholesale rose 36 percent. Europe grew strongly, but Asia Pacific declined 17 percent. Costs fell 16 percent, helping improve profitability.
Franchise and wholesale revenue increased 36 per cent to £7.3 million, driven by new UK wholesale partnerships with John Lewis, Liberty and Harvey Nichols, in line with the strategic emphasis on strengthening wholesale, Mulberry said in a press release.
Regionally, UK omnichannel revenue fell 10 per cent to £28.1 million, with in-store sales falling 7 per cent and digital falling 16 per cent, reflecting unprofitable store closures and reduced online promotions. Off-price sales grew above full-price sales, supported by better inventory management, while full-price stores benefited from a new retail incentive plan.
Omnichannel revenue in Europe increased 13 per cent to £6 million, led by strong performance in Ireland, which grew 25 per cent.
U.S. omnichannel revenue fell 4 percent to £4.7 million. Store sales increased 2 percent, while digital sales decreased 6 percent, largely due to digital concessions in the United States, which grew 5 percent year over year.
Asia Pacific omnichannel revenue declined 17 per cent to £7.7 million, with digital sales falling 6 per cent and in-store sales falling 20 per cent. The region experienced a double-digit revenue decline, affected by macroeconomic conditions and the closure of unprofitable stores.
The group's revenue fell 15 percent in the first quarter, but returned to growth in the second quarter, rising 10 percent. Omnichannel retail revenue decreased 16 percent in the first quarter and increased 1 percent in the second quarter, with the wholesale phase also affecting the division.
Improving sales mix and tighter inventory management lifted gross margin to 69.2 per cent, keeping gross profit stable at £37.3 million despite lower revenue.
Operating expenses decreased 16 per cent to £42.7 million, reflecting the cost base review undertaken in FY25 and continued operational discipline. Underlying operating expenses fell 13 per cent to £42.9 million, with reductions in staff, systems and communications costs and depreciation.
Mulberry reported an operating cash inflow of £0.2m in the period, before movements in working capital. A net outflow of working capital of £4.8m, due largely to a £4.9m increase in inventories to rebuild stock coverage in the main lines, resulted in net cash used in operating activities of £4.6m.
Net cash used in investing activities was minimal at £0.1m, reflecting lower capital expenditure on property, plant, equipment and intangibles. Overall, cash and cash equivalents decreased by £1.0 million to £7.2 million at the end of the period.
Net debt, excluding minority shareholder loans, rose to £21.6m, comprising cash of £7.2m, bank loans of £9.5m and a convertible loan note of £19.3m. Lease liabilities were reduced to £32.6m following regular payments and store closures.
Operationally, the group continued to optimize its store network, closing six loss-making stores in Asia and expanding its wholesale presence in the UK through new partners. A new retail incentive scheme helped improve store performance, with European stores increasing revenue by 11 percent and UK stores by 10 percent on a like-for-like basis, the statement added.
“This has been an encouraging first half as we continue to implement our 'Back to the Mulberry Spirit' strategy. We are still in the early stages of recovery, but the foundations we have laid are working and we are starting to see that reflected in performance,” he said Andrea Baldo, CEO of Mulberry Group. “We are strengthening our margin and improving our cash position through an increased focus on full-price sales and disciplined cost management, while our refreshed product offering and creative direction are reconnecting the brand with customers. The strong response to new icons Roxanne and Hackney shows that Mulberry's distinctive spirit continues to resonate.”
“While we remain mindful of the broader trading environment, the current momentum gives us confidence as we enter the key festive trading period. We are focused on maintaining this progress and continuing to build a stronger, more resilient business over the long term,” Baldo added.
Fiber2Fashion News Desk (SG)
