Mulberry is starting to see light at the end of the tunnel, despite posting a loss for its full-year trading this morning.
The bag brand's pre-tax profits plummeted 74 per cent to £4.5m – but this was actually better than expectations.
After tax the British firm made a loss of £1.4m, down from a profit of £8.6m last year.
Total revenues were down nine per cent to £148.7m, with wholesale dropping 29 per cent to £38.8m “as expected”, while retail sales were up one per cent to £109.9.
Despite this the company is proposing a dividend of 5p per share – the same as last year.
The outlook for the current financial year is encouraging – total retail sales are up 17 per cent for the 10 weeks to June 6.
Mulberry's share price was up more than two per cent as markets opened.
Why it's interesting:
Mulberry is part-way through its turnaround, spearheaded by chairman Godfrey Davis, who was left to pick up the pieces after the disastrous tenure of Bruno Guillon.
Guillon attempted to reposition the brand in the luxury sector, which resulted in alienating existing customers while failing to win over new ones.
As a result, Mulberry is taking the hit, lowering prices on current stock as it returns to the mid-level bracket where it had previously been successful and wooing back its original clientelle.
Davis has always acknowledged this would result in short-to-medium term pain for the business, and while the headline figures don't sound great, the results are starting to show.
What they said:
"We have seen a positive uplift in sales since November as a result of the actions we took at the beginning of the year," said Davis. “We have focused on creating desirable new products across the entire Mulberry range whilst continuing to invest for the longer term. Our initiatives to re-engage with our customers have delivered promising results.
"Under the leadership of Thierry Andretta and the creative direction of Johnny Coca, we look forward to the Mulberry brand fulfilling its global potential."
Andretta added: "I am pleased that the strategy we approved as a board last year is beginning to bear fruit.
“We are committed to strengthening our position in the UK whilst continuing to pursue our international growth strategy. We are focused upon translating the luxury values and Britishness of the Mulberry brand to a global audience."
Not out of the woods yet, but definitely on the road to recovery. Andretta, who joined in April, and the arrival of creative director Coca 18 months after Emma Hill quit should spur the brand on more.