Mulberry warns it will swing to a loss as coronavirus hits handbags
Luxury fashion brand Mulberry has become the latest brand to warn on the impact of the coronavirus on trading, as it anticipates losses in the second half of the year.
The brand said it would suspend payouts to shareholders as recent trading in its stores, particularly in the UK, had been severely impacted by the coronavirus crisis.
On Saturday Mulberry closed all of its UK stores and said it is reviewing its international stores “on a case by case basis”.
In Mulberry’s half-year results last November, the group said it expected to be profitable and cash generative in the second half of the year. However, the board now expects the company to make a small loss in the second half.
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The brand will not provide guidance for future performance “given the rapidly evolving nature of the situation”.
Mulberry said it had a “robust” balance sheet with net cash as at 20 March of £8.8m, plus additional liquidity through its £19m of undrawn bank facilities.
Chief executive Thierry Andretta said: “Our highest priority at this time is the health and safety of our colleagues, customers, and all other stakeholders. Whilst it is uncertain how long the virus will directly impact our markets and our businesses, we remain confident in the strength of our brand, and in our strategy over the long term”.
Mulberry joins a long list of retailers in the UK who have revised guidance and cut shareholder payouts as the impact of coronavirus dents footfall.
Footfall in the capital plunged 63.3 per cent last week, as office workers were advised to stay home. In shopping areas on the outskirts of London, footfall was down 21.9 per cent.
Last night Prime Minister Boris Johnson ramped up efforts to encourage Brits to practice social distancing by mandating the closure of all non-essential shops.