Monday, 20 August 2018

Luxury handbag maker Mulberry shares plunge 30% after it warns House of Fraser collapse will hit profits



Luxury handbag maker Mulberry has issued a profit warning after the collapse of House of Fraser into administration, shortly before it was bought by Sports Direct.
 
Mulberry, which operates 21 House of Fraser concessions, said it was expecting to take a £3m hit for exceptional costs in its next trading update for the six months to 30 September.


It comes days after administrators revealed the department store owed £484m to creditors before its collapse - including £2.4m to Mulberry.


Mulberry shares fell as much as 30% on Monday after the profit warning. Although they staged a slight recovery they fell back more than 29% to 400p at the close.


The company said in its announcement that UK trading "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," it added.




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