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Investing.com -- British luxury brand Mulberry Group plc (AIM:MUL) plans to raise £20 million to fund its growth strategy after reporting declining financial performance, according to the company on Friday.
The company said it also expects to report revenues of approximately £120 million for the 52 weeks ended March 29, 2025, down from £152.8 million in the previous year.
Mulberry anticipates an underlying loss before tax of around £23 million, compared to a £22.6 million loss in 2024.
Mulberry CEO Andrea Baldo, who leads a new management team implementing a transformation plan, said the company is "firmly in turnaround mode" focusing on rebuilding profitability and gross margin while investing in brand-building initiatives.
The company has already implemented approximately £5.9 million in annualized gross cost savings and plans to continue optimizing its store estate and enhancing operational efficiencies.
Challice Limited, Mulberry’s majority shareholder, has confirmed willingness to underwrite the entire fundraising if needed.
The company is currently in discussions with Challice and Frasers Group plc regarding the structure and terms of the fundraising.
HSBC UK Bank has agreed to relax Mulberry’s minimum liquidity covenant through the completion of the fundraising, expected in July 2025. This will release approximately £6.5 million in short-term liquidity.
The fundraising proceeds will be used to rebuild core stock inventory, invest in new revenue streams such as outlets and wholesale channels, fund selective marketing in core UK and US markets, and upgrade customer engagement tools.
Mulberry’s medium-term goals include achieving annual revenues of £200 million and an earnings before interest and tax margin of 15 percent.
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