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LONDON - British luxury brand Mulberry Group plc (AIM:MUL) plans to raise £20 million to fund its growth strategy and achieve medium-term financial targets, the company announced Friday in a press release.
The luxury retailer expects to report revenues of approximately £120 million for the financial year ended March 29, 2025, down from £152.8 million in the previous year. The company anticipates an underlying loss before tax of around £23 million, compared to a £22.6 million loss in 2024.
Mulberry’s management, led by Chief Executive Andrea Baldo, is implementing a transformation plan called "Back to the Mulberry spirit" to return the company to profitability. The company has set medium-term goals of achieving annual revenues of £200 million and an earnings before interest and tax margin of 15 percent.
The company has already made progress on its plan, including changes in senior management, new wholesale agreements with premium department stores, expansion in Nordstrom (NYSE:JWN) in the U.S. and David Jones in Australia, and a review of unprofitable stores.
HSBC UK Bank has agreed to relax Mulberry’s minimum liquidity covenant until the completion of the fundraising, expected in July 2025. This will release approximately £6.5 million in short-term liquidity. Challice Limited, Mulberry’s majority shareholder, has provided a cash-backed guarantee of £6.5 million to HSBC.
Challice has indicated willingness to underwrite the fundraising in full if needed, though the board is engaging with both Challice and Frasers Group plc, another major shareholder, to reach agreement on the structure and terms.
Trading in the 11 weeks since the financial year end has been in line with the board’s expectations, with no material overall revenue growth anticipated for the current financial year. The company has implemented approximately £5.9 million in annualized gross cost savings.
The audited financial results for fiscal year 2025 are expected to be published in July 2025, according to the press release statement.
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