Mulberry RTW Spring 2019

LONDON — Mulberry reduced losses in the year ending March 2019, even if costs to establish subsidiaries and shift business from wholesale to direct-to-consumer continued to eat into its bottom line.

Revenues were broadly flat at 166.3 million pounds, compared to 169.7 million pounds last year, while adjusted profit before tax fell to 1 million pounds from 8 million pounds last year.

Mulberry pared losses to 5 million pounds, from 6.9 million in fiscal 2018, with write-offs from the collapse of British retailer House of Fraser last July continuing to impact the company’s performance.

Thierry Andretta, chief executive officer of Mulberry, said results were “in line with expectations” and profits were mostly affected by the company’s investment in establishing new subsidiaries in Asia and shifting its John Lewis business in Britain from wholesale to retail.

As a result of the changes, some 90 percent of Mulberry’s sales are now generated by its own channels, and the shift in distribution strategy began to bear fruit in the current year.

Last year, the group took its South Korean operations in-house via a new, majority-owned company with existing South Korean partner SHK Holdings Ltd. SHK introduced a new, local site and omnichannel platform.

The brand also established subsidiaries in Japan and digital partnerships in China, as well as opening new store concepts in Dubai, London and New York and a concession on Farfetch.

Those changes helped to boost revenue in the first weeks of the current fiscal year. Sales were up 13 percent in the 11 weeks to June 15. International sales rose 31 percent, while trading in the U.K. remained challenging.

U.K. sales were up 7 percent and revenues fell 6 percent in the first 11 weeks.

“The group is making good progress in advancing its international strategy and direct-to-consumer model, whilst managing a challenging U.K. market,” said Andretta. “Looking ahead, we anticipate that international and digital sales will continue to grow whilst U.K. retail conditions are expected to remain uncertain. The group plans to invest further in its new Asian entities during this development phase, enhance its global digital platform and optimize the U.K. network.”