Mulberry warns of £3m hit after HOF collapse

0 The luxury brand is owed about £2.4 million by House of Fraser, where it runs 21 concessions

Mulberry has warned that profits could take a £3 million hit after the collapse of retailer House of Fraser.

The luxury handbag brand said the group’s profit for the year “will be materially reduced” as a result of flagging UK sales, particularly in House of Fraser, where it operates 21 concessions and employs 88 people.

It said: “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.”

However, it said trading in the rest of the world continues to develop “broadly in line” with management’s expectations and is in a “strong cash position”.

House of Fraser fell into administration a week and a half ago, before being snapped up by Mike Ashley’s Sports Direct. Mulberry was owed about £2.4m at the time of the store’s collapse, but Ashley has said he will not pay creditors for debts before his takeover.