Mulberry Group (AIM:MUL) shares fell 15% to 240p on Wednesday as deteriorating consumer sentiment caused its revenues to dip by 1% in the first half of 2023, according to the British luxury fashion company’s interim results.
UK retail sales were the worst hit with a 1% decline to £34.1mln year on year, while China retail sales actually increased by 6% despite harsh COVID-19 restrictions.
Pre-tax losses came in at -£2.8mln against pre-tax profits of £4.5mln in the first half of 2022, and while net cash fell sharply, the group retains £4.3mln in the bank.
In the results statement, Mulberry chief executive Thierry Andretta commented: “We have delivered a resilient performance across the group, supported by strong international demand and continued investment in the UK.
“Looking ahead, we are confident in our ability to execute our strategy and to continue to invest across the group for our future growth, in spite of the challenging economic and geopolitical backdrop.
“We are well placed for the festive trading period and will continue to drive the business forward to the benefit of all stakeholders.”
Analysts at Shore Capital noted an investment case “predicated upon Mulberry being well-positioned to deliver on the Asian-focused geographical expansion and potential product extension strategy” in combination with Mulberry shares trading at a 30% discount to its peer group.
The AIM-quoted shares are around 19% lower in the year-to-date, with a market capitalisation of £144mln.