Mulberry Group PLC (MUL.LN) said Wednesday that fiscal 2018 pretax profit declined 8% and that it will form a new majority-owned joint venture to develop its business in South Korea.
The luxury leather-goods company said it has signed an agreement with SHK Holdings Ltd. to form a new entity called Mulberry (Korea) Co.
Mulberry said it will own 60% of the new entity and the two companies will invest 4.6 million pounds ($6.1 million) to buy assets and to develop the business in South Korea. Mulberry expects to incur around GBP3 million of costs in the current financial year for the joint venture.
Meanwhile, for the financial year ended March 31, Mulberry said it made a profit of GBP6.9 million compared with GBP7.5 million the year earlier.
Revenue rose 1% to GBP169.7 million from GBP168.1 million, it said. Retail sales grew 3%, with U.K sales broadly flat and international sales up 20%. Digital sales grew 14% making up to 17% of group revenue, the company said.
For current trading, Mulberry said retail like-for-like sales fell 7% in the 10 weeks to June 2 with international sales up 1%. However, U.K. sales were down 9% due to lower footfall in the period, it said.
London-listed Mulberry maintained the dividend at 5 pence a share.
“Following another period of cash generation, our balance sheet is strong. Although the U.K. market remains challenging, we will continue to invest in our strategy to develop Mulberry into a global luxury brand to deliver increased shareholder value,” Mulberry Chief Executive Thierry Andretta said.