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The financial results for the year ended March 31, 2015 have been released on June 11, highlighting the highs and lows of the past year. Full year pre-tax profits stood at US$6.9 million (£4.5 million), with a sharp decline from the US$27 million (£17.4 million) reported in 2014, result of the strategy to go upmarket undertaken by the company in 2013.
However, the turnaround and the consequent lowering of prices in mid 2014 did bear fruit from November onwards with the presentation of the Spring/Summer 2015 collection and an enlargement of the less than US$1,550 (£1000) items, making up 66% of its collection from 45%. Retail revenues, however, registered a 9% decline in H1 but a rise of 9% in H2, stabilising at US$170.3 million (£109.9 million) for the year (+1%). Wholesales registered a sharp decline of 29% to US$60 million (£38.8 million), while online sales grew by 15%, accounting for 12% of the total sales to US$27.9 million (£18 million).
“Our initiatives to re-engage with our customers have delivered promising results” commented Godfrey Davis, Mulberry Chairman. The Chief Executive Officer, Thierry Andretta, appointed in April, said he was pleased that the strategy approved by the Board is now bearing fruit. Moreover, they are both looking forward to start the work with the new Creative Director, Johnny Coca, who will join the team on July 8.
The main KPI at this point is increasing revenues both on the Retail and Wholesale channels. Mulberry also said that a second UK factory, which opened in June 2013 has now reached its full capacity, guaranteeing a 50% UK made production with high quality standards.
Fiona Cincotta, a Senior Market Analyst at www.finspreads.com commented about Mulberry’s results: “Mulberry reported a full year pre-tax profit of £4.5 million, a far cry from the £36 million reported for 2012. This highlights the extent of the hangover that Mulberry is suffering after its push to go upmarket and raise prices back in 2013. However the company sensibly discarded the upmarket strategy in mid 2014 and recent sales figures are starting to show signs of life again. Group sales for the second half of last year grew 9% while sales for the ten weeks to June 6 grew an impressive 17%, so it looks at if Mulberry may be on their way back to a more profitable route”, she said.