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Mulberry Group PLC MUL Trading Update



  Mulberry Group PLC (MUL) - Trading Update

RNS Number : 2653P
Mulberry Group PLC
23 October 2012
 



Mulberry Group PLC ("Mulberry")

Trading update

Mulberry Group plc, the English luxury brand, is today updating the market on
trading for the six months to 30 September 2012.

·     Total revenue of £76.5m, up 6%

·     Retail revenue of £46.5m, up 13% and up 7% like-for-like

·     Wholesale shipments to third parties of £30.0m, down 4%

Retail

Total retail sales increased by 13% compared to the same period last year:

·     UK retail sales were up 10% with UK full price sales performing in line
with our expectations. UK off-price sales have remained weaker, however this
primarily reflects a strategic decision not to make product specifically for
the off-price business.

·     International retail sales, which are currently a small part of the
business, were up 41%, but have not met our expectations for the first half of
the year. However, we remain confident in our international expansion strategy
and have recently opened stores in San Francisco, Washington D.C., Berlin and
Frankfurt Airport.

Wholesale

Wholesale shipments were down 4% compared to the same period last year,
reflecting three factors:

·     We have made a strategic decision to rationalise certain international
wholesale accounts in order to improve the quality of Mulberry's distribution
network. This will result in a reduction in wholesale sales in the current
year, but is consistent with our long term strategy of growing brand value;

·     A more challenging external environment in Asia, resulting in cautious
ordering by franchise partners; and

·     Tough half year comparatives which were boosted by the restocking of the
wholesale channel last year.

Primarily due to lower wholesale revenue, Mulberry now expects Group revenue
growth for the year to 31 March 2013 to be below market expectations. As a
result of this, combined with the previously highlighted investment being made
in international retail expansion, we now expect full year profits to be below
last year.  However the business continues to be strongly profitable and
generate significant cash to fund our future expansion.

Bruno Guillon, Chief Executive Officer, commented:

"Mulberry's core UK retail business and key wholesale accounts continue to
perform well in the context of a more challenging external environment.
Although international retail sales are behind expectations, newly opened
stores are performing satisfactorily and we are on track to open our target of
15-20 stores during 2012/13. The steps we have taken to improve the quality of
Mulberry's distribution network in both the retail and wholesale channels will
result in the short term slowing of sales growth. However, we firmly believe
these steps are in the long term interests of building Mulberry into a global
luxury brand.

The Mulberry brand continues to gain recognition globally and we remain very
confident in the outlook for the business. We continue to focus on creativity,
craftsmanship and quality and in this context will start the construction of
our second UK factory within the next few weeks."

Revenue by channel

          Six months to 30 September
£ million  2012    2011    % change
Retail     46.5    41.0      +13%
Wholesale  30.0    31.3      -4%
Total      76.5    72.3      +6%

 

Revenue by region

              Six months to 30 September
£ million      2012    2011    % change
UK             47.5    42.9      +11%
International  29.0    29.4      -1%
Total          76.5    72.3      +6%

 

For further details please contact:

 

Pelham Bell Pottinger              0207 861 3232

Dan de Belder

 
Altium                             0207 484 4040

Ben Thorne / Katherine Hobbs

 
Barclays                           0203 134 9803

Jon Bathard-Smith / Nicola Tennent

 
Mulberry Investor Relations        0207 605 6771

Amelia Fincher

 

                     This information is provided by RNS
           The company news service from the London Stock Exchange
 
END
 
 
TSTBKBDQOBDDOKB -0- Oct/23/2012 06:00 GMT
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