UK-based Mulberry Group PLC (GB:MUL) announced plans to revamp its business amid increased H1 losses. In the first half of FY24, the company’s pre-tax loss widened to £15.7 million from £12.8 million in the same period last year. Meanwhile, revenues dropped 19% year-over-year to £56.1 million. Following the release of its H1 results, MUL shares tumbled nearly 12% during yesterday’s trading session.
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Mulberry is a manufacturer and retailer of luxury leather handbags and other accessories.
Mulberry Targets Profitability
Mulberry aims to improve its business by streamlining operations and boosting margins. This includes reviewing its internal structure to make the organization more efficient and adaptable.
The company is also making strategic changes to product offerings, pricing, and distribution strategies. For instance, Mulberry plans to reduce the price of most of its luxury handbags to expand the brand’s appeal and increase its sales. Moreover, the company has decided to cut approximately 85 corporate positions, including roles in its commercial, product, and finance divisions.
Last week, another British luxury brand, Burberry (GB:BRBY), unveiled a strategic plan to attract customers back to its brand.
Moving ahead, Mulberry expects that its full-year performance will be stronger in the second half, driven by the festive season.
Mulberry’s H1 Results Raise Concerns for Luxury Retail
Mulberry’s latest results raise concerns for the wider luxury retail market, with declining sales among major brands. Also, the slowdown in demand for luxury products in China, a key market, remains a concern as consumers look for more affordable options.
European fashion house LVMH (FR:MC) also reported a 3% dip in Q3 revenues last month, citing weaker demand in China.
Similarly, Mulberry also flagged reduced demand in its domestic market and China, along with intense competition from larger rivals. In the first half, Mulberry’s UK retail sales fell by 14%, while Asia Pacific declined by 31%.
Over the last 12 months, Mulberry shares have lost 28.5% in trading.
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