British luxury handbag maker Mulberry Group has reported a 21% decline in group revenue to £120.4m ($163.5m) for the fiscal year 2025 (FY25) amid challenging macro-economic conditions impacting the global luxury market.
The group has experienced a 20% decline in its UK retail and digital revenues, attributing the drop to broader economic challenges, uncertainty and inflationary pressures that have altered consumer spending patterns and behaviours.
In North America, retail revenue fell by 1% compared to the previous period.
The company recorded an underlying pre-tax loss of £23.7m. This was due to decreased revenue influenced by the economic environment and activities aimed at optimising stock levels.
The reported pre-tax loss stood at £31.8m, partly due to operational cost reductions implemented throughout the year, which are expected to extend into FY26.
Gross margin for the period was 66.8%. This is largely a result of inventory optimisation efforts in FY25 that included promotional sales and markdowns, as well as changes in the mix of wholesale customers.
Mulberry outlined a new strategy, Back to the Mulberry Spirit, on 30 January 2025 “to restore profitability through simplification, brand realignment and enhanced customer connection”.
CEO Andrea Baldo stated: "We have made significant progress in laying the foundations for Mulberry's turnaround. Since launching our Back to the Mulberry Spirit strategy in January, we have acted at pace to simplify the business, reduce costs, and refocus on our most profitable channels and markets. This is an ambitious transformation, underpinned by operational discipline and a commitment to placing creativity at the heart of everything we do."
"At the same time, we are reinvigorating the brand to reassert its cultural relevance and emotional resonance with customers. The launch of our new campaign, A Return to Somerset, marks an important milestone, celebrating our roots, values and the distinct British voice that defines Mulberry."
Mulberry also disclosed raising £20m from major shareholders Challice and Frasers Group, through the issuance of new convertible loan notes.
In parallel, a separate retail offer will enable minority shareholders to maintain their stakes in the company, potentially adding £1.2m before expenses.
The proceeds will be used to make targeted investments for future expansion and achieve medium-term financial targets.
As part of its ongoing transformation, Mulberry is targeting FY26 annual revenue in excess of £200m and an adjusted earnings before interest and taxation (EBIT) margin of 15% over the mid-term.
The company noted that the current trading aligns with the board's expectations, with an 18% year-on-year revenue decline in the first nine weeks post-FY25.
it also said that full-price retail and digital sales were showing positive trends.
The company has appointed James France from Frasers to its Board as a non-executive director effective 30 July 2025.
Baldo added: "We welcome the additional capital injection from both our major shareholders, which will enable us to keep moving with pace - investing in product, digital, and international growth to deliver long-term value and the appointment of James France to the board."
