Mulberry faces £3m blow from House of Fraser collapse
LUXURY brand Mulberry has warned that the collapse of House of Fraser into administration could cost it as much as £3m, causing its shares to plunge 30pc.
The leather handbag and clothing company, which operates 21 House of Fraser concessions employing 88 people, expects to stump up £3m for exceptional costs in the six months to Sept 30.
According to creditor documents published by House of Fraser administrator EY, Mulberry is owed £2.4m. The news came as 627 jobs were put at risk at warehouse operator XPO Logistics following a standoff with new House of Fraser owner Mike Ashley over the £30.4m it was owed.
The department store chain was forced to cancel all online orders after XPO, which operates its Milton Keynes and Wellingborough warehouses, refused to fulfil orders over the dispute.
Mulberry said: “Since the group reported in June 2018, the UK market has continued to remain challenging and sales in House of Fraser stores have been particularly affected.
“If these sales trends in the UK continue into the key trading period of the second half of the financial year, the group’s profit for the whole year will be materially reduced.”
Mulberry also announced the creation of a South Korean subsidiary and said that it had a “strong cash position” to continue its global expansion.
Mulberry’s shares fell 29.7pc to 400p following the announcement. Its share price has plunged 54pc since the start of the year.
Thierry Andretta, the chief executive of Mulberry, warned earlier in the summer that Asian shoppers were opting to spend their money outside London because luxury retailers had put up their prices.