British luxury brand Mulberry has recently announced that it is expecting to experience a small financial loss in the second half of the year due to the ongoing Covid-19 pandemic. Like many businesses, Mulberry has faced a significant decline in trading, particularly within its home market of the UK. As a result, the company has made the decision to temporarily close all of its stores in the UK and is currently reviewing its international portfolio of stores.
To ensure the preservation of its cash reserves and secure future value, Mulberry is actively managing its capital and actively seeking opportunities to save costs. In their half-year results announcement, the company had originally anticipated profitability and strong cash generation in the second half of the financial year. However, due to the impact of the pandemic, Mulberry is now expecting a small loss. The precise impact on its international markets has yet to be disclosed.
Despite the challenges posed by the pandemic, Mulberry remains optimistic about its brand’s long-term prospects. The company’s balance sheet remains strong, with net cash totaling £8.8 million as of March 20. In addition, Mulberry has £19 million in undrawn bank facilities and continues to maintain positive conversations with its lenders in order to maximize operational flexibility and banking agreements. Furthermore, Mulberry benefits from the support of a majority shareholder.
Thierry Andretta, CEO of Mulberry, has emphasized the importance of prioritizing the health and safety of employees, customers, and stakeholders during this time. Although the duration and direct impact of the virus on the company and its markets remain uncertain, Mulberry maintains confidence in the strength of its brand and its long-term strategy.