High competition weighs on Mulberry’s H1 earnings

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Hit by a slowdown in sales growth amidst intense completion in the British high street, UK luxury fashion group Mulberry Group Plc. witnessed a dip in first half 2013-14 profits.

The maker of women’s wear, accessories and hand bags, reported a 28 per cent dip in pre-tax profit at 7.2 million pounds in the six months ended September 30, 2013 from 10 million pounds in the same period a year ago.Revenue rose a tepid 2 percent to 78.1 million pounds in the first half of 2013-14 from 76.5 million pounds in the same period a year ago as discounts and promotions offered by competitors slowed sales. The company witnessed a 4 per cent dip in online sales in H1 2013-14, year on year.Led by a surge in sales in overseas markets and solid performance in its home market, Mulberry reported a 6 percent rise in retail sales to 49.5 million pounds in the first half of 2013-14 from the same period a year ago.

Despite a dip in footfall, retail sales (excluding online) in the UK, climbed 5 per cent to 36.6 million pounds, year on year in the six months ended September 30, 2013 amid stronger conversion rates.
Robust performance in the international markets such as Europe and North America was the one bright spot for the UK company in the first half of the current financial year as international retail sales (excluding online) were up 29 per cent to 6.3 million pounds in the half-year ended September 30, 2013 from the year ago period. The company launched nine new international stores during the first six months of FY 2013-14.
Amidst weakness in orders from European wholesale partners, Mulberry witnessed a 5 per cent dip in wholesale revenue to 28.6 million pounds in the half-year 2013-14.
 
Mulberry is pushing ahead with its international expansion plans with the company on track to open 15 new stores for the full year as it relies on overseas markets to fuel sales growth amidst a price war in the UK
Courtesy:fibre2fashion
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