Luxury fashion retailer Mulberry Group PLC (LON:MUL) swung to an annual loss as it took a £3mln hit form the collapse of department store chain House of Fraser.
The company, best known for its handbags, reported a loss before tax of £5.0mln for the year to the end of March, compared to a pre-tax profit of £6.9mln last year.
READ: Mulberry slides as House of Fraser collapse dents bottom line
Mulberry said House of Fraser’s collapse led to a bad debt and fixed write off of £2.1mln along with fixed asset impairment costs of £800,000.
Sports Direct International PLC (LON:SPD) bought House of Fraser from administration last August.
Mulberry, which operates concessions in House of Fraser, said while it had entered into an agreement with Sports Direct on the department store group the business continued to trade below previous levels.
House of Fraser stores accounted for 40% of Mulberry’s UK outlets.
Mulberry’s annual revenue from the UK fell 6% to £114.6mln, compared to a 7% increase in international revenue to £57.7mln.
Total group revenue dipped 2% to £166.3mln with retail revenue up 2% to £134.8mln and wholesale revenue down 16% to £31.5mln.
Mulberry maintained its dividend at 5p per share.
“Looking ahead, we anticipate that international and digital sales will continue to grow whilst UK retail trading conditions are expected to remain uncertain,” said chief executive Thierry Andretta.
Mulberry said the delay to the UK’s departure from the European Union continues to create uncertainty, which could impact the performance of the business.
In the first 11 weeks of the new year, total retail sales rose 13% with international up 31% and UK up 7%.
Shares rose 4.6% to 280p in morning trading.