By Scott Kanowsky
Investing.com — Shares in Mulberry Group PLC (LON:) fell by more than 10% on Wednesday after the luxury leather goods maker reported a first-half loss due in part to Britain’s cost-of-living crisis hitting demand in the country.
The group’s reported loss before tax for the 26 weeks to October 1 came in at £3.8 million, down from a profit of £10.2M during the corresponding period last year.
In a statement, Mulberry said the decline stemmed from additional investment in marketing and technology, as well as acquisition costs in Sweden and Australia, which led to operating expenses ballooning by 42% to £48.6M.
Group revenue also decreased by 1% following a steep slump in U.K. digital sales as more customers chose to shop in physical stores after the lifting of COVID-19 restrictions.
“The wider macro-economic environment continues to present some uncertainty, in particular with regards inflationary pressures,” the firm said.
However, this was offset by a 6% increase in sales in China, where shoppers shrugged off strict COVID rules and spent heavily online.
Full price sales and elevated volume efficiencies also helped company-wide gross margin climb slightly to 71%.
In the eight weeks to November 26, Mulberry said retail revenue is showing signs of improvement in the face of ongoing economic uncertainty, adding that it is “well prepared” for its key holiday trading period.
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