Ƶ handbag maker Mulberry has raised £20m from its largest shareholders as it revealed a plunge in sales over the past year.
The announcement comes just two weeks after the Somerset-headquartered fashion firm confirmed it was seeking extra capital to fund its growth strategy and help meet medium-term revenue and profitability targets.
Bosses at the Chilcompton-based company said it has made “significant progress” in its turnaround efforts, after being hit hard by a slowdown in luxury spending in recent years.
On Thursday (July 10), Mulberry said Singapore-based Challice and Sports Direct-owner Frasers Group - its two largest shareholders - supported a £20m fundraise to provide the business with an injection of cash.
It will also appoint James France from Frasers’ onto Mulberry’s board of directors.
At the same time, Mulberry posted a 21% slump in revenues to £120.4m for the year to March 29.
The business was hit by a 20% fall in Ƶ retail and digital revenues after it was impacted by “macro-economic conditions, uncertainty and inflationary pressures which has affected consumer spend and habits”.
Underlying pre-tax losses grew to £23.7m for the year as a result, compared with a £22.6m loss a year earlier.
The business is currently undergoing a major turnaround plan under recently appointed boss Andrea Baldo.
The plan includes efforts to simplify its operations, including the closure of 12 loss-making shops in Asia, and a “refresh” of Mulberry’s brand identity.
Sales across the company declined 18% over the nine weeks June 1, matching board expectations.
Mr Baldo said: “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.”
Shares in the company were 5% lower on Thursday afternoon.
