Mulberry Group (AIM:MUL) has delivered a worrying set of half-year results highlighting the challenges the British label faces in a time of plummeting global luxury spending.
After rejecting numerous takeover advances from Frasers Group PLC (LSE:FRAS), Mulberry has reported a 19% year-on-year revenue decline to £56.1 million on a margin nearly 400 basis points smaller than last year.
The group posted a pre-tax loss of £15.7 million, widening from the £12.8 million loss recorded in the prior year.
Chief executive Andrea Baldo did not gloss over the challenges Mulberry is contending with.
“The first half results illustrate the clear need to reprioritise and rebuild the business,” he told shareholders, adding: "There is no question that our industry is facing a period of significant uncertainty, driven by a challenging and volatile macroeconomic environment that is impacting consumer confidence in several markets, particularly in our home country.”
Baldo hinted at headcount reductions to help stem ongoing losses: "In response to current market conditions, we have taken decisive steps to streamline operations, improve margins, reduce working capital, and strengthen our cash position.
“This has also meant reviewing our internal team structure to ensure we become a leaner, more agile organisation.”
Mulberry avoided discussing the icy relationship that has grown between it and major shareholder Frasers.
After dropping its campaign to take control of the business in October, Frsers said it is “increasingly concerned over the governance of Mulberry, the apparent lack of a commercial plan against a backdrop of increasing market headwinds, and critically, the financial position in which Mulberry currently finds itself”.