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Mulberry narrows loss, shares rise

Mulberry shares (LON: MUL) opened higher after the group posted reduced half-year losses in twenty-six weeks ended 26 September 2020.

In the latest trading update, the luxury retailer said that sales were hit by the most recent lockdown and fell by 19% in the eight weeks to October.

As store closures and reduced demand amid the pandemic hit the retailer, revenue was down by 29% to £48m. Digital sales increased by 68% from £13.9m to £23.4m.

Mulberry chief executive, Thierry Andretta, said:

“I am proud that in spite of the devastating effects of the global pandemic, we have made further progress on our long-term strategy to build Mulberry as a sustainable global luxury brand. This is focused around: a truly omni-channel network and market leading digital platform, increased presence in Asia, and a relentless focus on innovation and sustainability, offering our customers beautiful products, made to last in our Somerset factories.

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“This strategy enabled us to withstand some of the pressures that we, and indeed the wider retail and hospitality sectors, have been faced with. In particular, using our market leading global digital network to replace retail sales with digital wherever possible,  achieving high growth in China and Korea, and reacting quickly to flex our agile supply chain, enhancing market reactivity and reducing lead time, to match the increase in digital demand.

“In spite of all of these self-help measures, we cannot avoid the fact that the damage the coronavirus has caused to business, decimating high streets and the tourism industry, is severe. For this reason, in order to ensure that the business was able to navigate through this difficult time, we took the painful decision to implement a far-reaching cost reduction and optimisation programme.

“As we look to the future, we remain confident in our strategy and in the relevance and durability of the Mulberry brand. There are of course many obstacles ahead, not least the upcoming changes to tax-free shopping in the UK that could hamper the wider retail and economic recovery,  but we are grateful to be able to open our doors again in England on 2 December and to be able to trade across all our platforms in this crucial Christmas trading period. I would like to take this opportunity to thank my colleagues for their resilience, their hard work and their dedication to Mulberry.”

Mulberry shares (LON: MUL) jumped 10% to 278.6p in early trading on Thursday.

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