Mulberry hails Alexa bag relaunch success after pandemic hit to sales
Luxury handbag maker Mulberry has revealed a “strong reaction” to the relaunch of its famous Alexa design as it seeks to recover from plunging sales due to the pandemic.
The firm reported a 29% fall in group sales to £48.9 million for the six months to September 26, although reported pre-tax losses narrowed to £2.4 million from £10.1 million a year ago as it cut costs and boosted online trade.
Sales declines hit 39% in the first quarter before paring back to 18% in the following three months as trading improved.
Mulberry said recent sales in the eight weeks to November 21 fell 19%, with trade hit by retail closures due to the second English lockdown.
The results come after Mike Ashley’s retail empire, Frasers, increased its stake in Mulberry to 36.8% earlier this month.
Frasers must now confirm whether it intends to make a takeover bid for Mulberry by December 17.
Mulberry said it is “very pleased by the strong reaction” to the relaunch of its Alexa bag, which is made with sustainable leather at its Somerset factory.
It has also managed to shift to online sales to help offset the impact of Covid-19, but warned of an ongoing hit to trade from the pandemic over the remainder of its financial year.
Online sales surged by 68% to £23.4 million in the first half, while it was also helped by strong demand across Asia.
Mulberry said: “Despite the recent positive news about vaccine progress, Covid-19 is likely to continue to impact our trading for at least the remainder of the current financial year.”
“Our expectations will undoubtedly be negatively affected by any further countrywide lockdowns or a ‘second wave’ of Covid-19,” it added.
Shares in the group lifted 5% on Thursday morning.
In June, Mulberry announced plans to slash its workforce of 1,500 staff by a quarter to help weather the coronavirus crisis.
Chief executive Thierry Andretta said: “In spite of all of these self-help measures, we cannot avoid the fact that the damage the coronavirus has caused to business, decimating high streets and the tourism industry, is severe.
“There are of course many obstacles ahead, not least the upcoming changes to tax-free shopping in the UK that could hamper the wider retail and economic recovery, but we are grateful to be able to open our doors again in England on December 2 and to be able to trade across all our platforms in this crucial Christmas trading period.”