Mulberry warns of profit plunge following House of Fraser collapse

Growth | Latest News | Retail

Luxury brand Mulberry has issued a profit warning following House of Fraser slipping into administration, before it was bought by Sports Direct for £90m.

The handbag maker operates 21 House of Fraser concessions with the company saying it’s expecting to take a £3m hit for exceptional costs.

These figures will effect the company’s next trading update for the six months to 30 September.

House of Fraser reportedly owed £484m to creditors before its collapse, which included £2.4m to Mulberry.

In a statement the company has said 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.

Mike Ashley, owner of Sports Direct, has said since the purchase that he will not pay suppliers any money owed before his takeover is completed.

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