Luxury handbag-maker Mulberry warned it expects to slump to a second-half loss as it said trading has been “severely impacted” by the coronavirus crisis.
The group’s UK stores have been closed since March 21 and it is reviewing its international outlets on a “case-by-case basis”.
It said: “Whilst the board remains confident in the strength of the Mulberry brand, recent trading in our stores, particularly in the UK, has been severely impacted by the Covid-19 crisis.”
The Somerset-based firm – which sells high-end bags costing upwards of £1,000 – had been hoping to turn a profit in the final six months of its financial year to the end of March, but now said it is set to post a small loss.
It added that it is now “working to protect Mulberry’s cash and to secure future value for its stakeholders by proactively managing its capital as well as identifying opportunities for cost savings”.
It has suspended shareholder dividend payouts until further notice.
Mike Ashley’s Frasers Group bought a 12.5% stake in Mulberry last month.
Mulberry had already been struggling financially before the coronavirus pandemic struck, with bosses warning that the UK market remains tough and heavy discounting is hitting profits.
In November, the company said it recorded a £9.9 million pre-tax loss for the six months to September 28.
Chief executive Thierry Andretta said: “Our highest priority at this time is the health and safety of our colleagues, customers and all other stakeholders.
“Whilst it is uncertain how long the virus will directly impact our markets and our businesses, we remain confident in the strength of our brand and in our strategy over the long term.”
The UK makes up nearly two-thirds of Mulberry’s sales, but Mr Andretta has been looking to increase its international business – and Asia in particular – to reduce its reliance on its home market.