Mulberry widens losses after taking £2.1m hit on House of Fraser collapse

Luxury handbag maker Mulberry widened losses in the first six months of the year following the collapse of House of Fraser.

The figures

Total revenue for the six months to the end of September was £68.3m, eight per cent down on the previous year.

It reported an underlying pre-tax loss of £3.6m, compared with a loss of £0.6m in the same period in 2017.

But its reported pre-tax loss was £8.2m, which included a £2.1m one-off cost following the collapse of House of Fraser, £2.5m to launch in Korea and an anticipated £1.4m needed to set up concessions with John Lewis.

Like-for-like UK sales were also down seven per cent for the six weeks to 3 November and down 11 per cent over the six months.

Why it's interesting

The luxury handbag maker had warned it would take a £3m hit from the collapse of House of Fraser as it operated 21 concessions with the department store chain.

Mulberry has now signed an agreement with John Lewis, moving away from Mike Ashley's vision for House of Fraser.

But the underlying loss shows that behind the House of Fraser disruption the retail environment has also contributed to lower sales at Mulberry.

What they said

Chief executive Thierry Andretta said: “We are delivering on the strategy to develop Mulberry as a global luxury brand with new subsidiaries in Korea and Japan, the creation of digital partnerships in China and the additions to our own store network in Asia.”

“In the UK, our most important market, we are pleased to have signed a concession agreement with John Lewis & Partners, advancing our direct to consumer reach.”