Mulberry's share price falls as British bag brand edges into profit

 
Catherine Neilan
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FASHION-BRITAIN-MULBERRY
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Mulberry's share price fell this morning after the premium bag brand reported a small improvement as part of its ongoing turnaround plan.

The figures

The British brand has posted a profit of £100,000 for the six months to 30 September, compared with a loss of £1.1m for the same time last year.

Mulberry's revenue rose five per cent to £67.8m, while gross profit margin increased by 1.6 per cent to 61.5 per cent.

In current trading, the business said retail salse for the 10 weeks to 5 December were up four per cent, noting its Christmas video had been watched 1.7m times.

Why it's interesting

Mulberry is part-way through a turnaround to get the business back on track after a disastrous time under former chief executive Bruno Guillon, whose ill conceived plan to take the bag brand into the luxury market backfired, alienating former customers without attracting enough new fans.

Chairman Godfrey Davis has been steering the ship back towards growth, though has stepped back since hiring Thierry Andretta as chief executive and Johnny Coca as creative director.

Some of the improvements deployed by Davis are already starting to bear fruit, but the pace of change is relatively slow. Perhaps that is why Mulberry's share price was down 1.5 per cent in early morning trading.

What Mulberry said

Andretta said: "Our strategy is beginning to deliver tangible results in line with our expectations. We look forward to Johnny Coca's first Mulberry collection which will emphasise our Britishness and our heritage in leather, whilst delivering great quality within our targeted price range.

"We remain committed to our UK manufacturing base, which produces around 50 per cent of our handbags. We are excited about the future and look forward to the Mulberry brand fulfilling its potential both in the UK and internationally."

In short

Green shoots are appearing, but the turnaround needs to pick up pace.