Mulberry warns of COVID-19 impact

United Kingdom
Published:  26 March, 2020
Mulberry, The Willows factory in Somerset, UK

Following the directives of the British government due to the coronavirus spread, the leather handbags manufacturer closed all its UK stores until further notice.

Mulberry said its Board had carefully considered the potential impact of COVID-19 on the company's trading performance, including running various scenarios as to the possible impact on sales, profits and cash flows. “Whilst the Board remains confident in the strength of the Mulberry brand, recent trading in our stores, particularly in the UK, has been severely impacted by the COVID-19 crisis”, said the manufacturer, adding that it is currently reviewing its international portfolio of stores on a case by case basis.

The company’s current financial year ends on March 28, 2020. In its half year results announcement released in November, Mulberry highlighted that it expected to be profitable and cash generative in the second half of the year. However, as a result of the impact on the company's trading of COVID-19, the Board said it now expects the company to make a small loss in the second half.

Mulberry said it has “a robust balance sheet” with net cash as of March 20 of £8.8 million (US$10.47 million), with additional liquidity through its £19 million (US$22.6 million) of undrawn bank facilities.