Mulberry's Losses Widen as UK Market Deteriorates

LONDON, United Kingdom — British luxury brand Mulberry reported a wider first-half loss due to investment costs and a tough trading environment in its home market, but forecast a better second half.

Under Chief Executive Thierry Andretta, the firm, best known for its leather bags, is pursuing a strategy to become a global luxury brand through developing international markets and extending ranges and its online business. However, its shares have fallen 23 percent over the last year.

The group currently trades from 102 owned stores and 21 franchise stores across 25 countries.

It said on Wednesday it made a loss before tax of £9.9 million in the 26 weeks to September 28, versus a loss of £8.2 million in the same period last year.

Overall revenue was flat at £68.9 million. While international sales rose 12 percent, UK sales dipped 4 percent, reflecting what it described as an increasingly promotion led trading environment and lower traffic to stores.

Mulberry said retail sales were currently reflecting similar trends.

"Against an uncertain backdrop in the UK and with the important Christmas period ahead, the board expects the group to trade profitably and to generate cash during the second half of the financial year," it added.

Shares in Mulberry closed Tuesday at 280 pence, valuing the business at £168.3 million.

By James Davey; editor: Kate Holton.