High risk and struggling international growth means Mulberry remains a ‘hold’

As Mulberry reports half year results Graham Spooner, investment research analyst at The Share Centre, explains what it means for investors.

“Luxury goods company Mulberry reported a first half loss this morning. The fierce competition and a change in strategy has impacted figures, however the company hinted that trading over the last few weeks has started to show some encouraging signs of improvement. Investors will be keen to see if this can be sustained in this important Christmas and the New Year period.

“We believe that it is too early to see if the new strategy will work and our confidence in the company's ability to transition itself to a more international business has been knocked. We continue to recommend Mulberry as a high risk ‘hold’, it remains highly rated and competition in 2015 could bag itself a bigger market share. Contrarian investors may see the lower share price as a more attractive entry point. However, any further disappointments in trading conditions will hit the shares hard as we have already seen on several occasions.”