Mulberry: Luxury fashion firm raises £20m from shareholders after sales plunge lower
Luxury fashion firm Mulberry has raised £20m from its largest shareholders as it revealed a plunge in sales over the past year.
Bosses at the handbag maker said it has made “significant progress” in its turnaround efforts, after being hit hard by a slowdown in luxury spending in recent years. Last month, the company said it planned to launch a cash-call in order to help stabilise its finances amid a challenging backdrop.
The Somerset-based firm said Singapore-based Challice and Sports Direct-owner Frasers Group, Mulberry’s two largest shareholders, supported a £20m fundraise to provide the business with fresh capital. It will also appoint James France from Frasers’ onto Mulberry’s board of directors.
It came as Mulberry blamed the shrinking luxury market for a 21 per cent slump in revenues to £120.4m for the year to March 29.
This included a 20 per cent fall in UK retail and digital revenues, after it was impacted by “macro-economic conditions, uncertainty and inflationary pressures which has affected consumer spend and habits”. Mulberry saw underlying pre-tax losses grow to £23.7m for the year as a result, compared with a £22.6m loss a year earlier.
The business is currently undergoing a major turnaround plan under recently appointed boss Andrea Baldo.
The plan includes efforts to simplify its operations, including the closure of 12 loss-making shops in Asia, and a “refresh” of Mulberry’s brand identity.
Sales across the company declined 18 per cent over the nine weeks to June 1, matching board expectations.
Mr 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.”