The Somerset-headquartered brand launched a strategy last year aimed at returning the business to profit

Mulberry has revealed shrinking losses and accelerating sales as its turnaround efforts continue to gather pace.

The Chilcompton-based fashion brand, known for its leather handbags, launched a major turnaround plan early last year as part of efforts to shore up its finances and return to profit.

On Wednesday, the London-listed firm reported a pre-tax loss of £8.9m for the year to March 28, decreasing from a £32.2m loss a year earlier.

Mulberry said profitability has been buoyed by an increase in sales at full price and reduced promotional activity.

The group also cut its costs by around 10% over the year, despite investment into its marketing, brand and digital operations.

It came as the company delivered a 4% increase in revenues to £125.5m for the year, with growth accelerating in the second half, which saw an 11% rise.

In the UK, like-for-like sales rose by 8% on the back of strong growth from its retail shops, which saw a 19% like-for-like increase.

It welcomed more new customers as “new products landed and resonated”, while Mulberry also benefited from improvements in stock availability.

Andrea Baldo, chief executive of Mulberry, said: “We returned the business to growth, significantly reduced our losses and strengthened gross margin through greater full-price discipline.

“What encourages me most is the response from UK customers.

“More than half of our retail and digital sales came from returning customers, demonstrating that we are winning back former clients who already know and love the Mulberry brand and the importance of regaining relevance in our home market in order to grow internationally.”

Shares in the company were 2.2 per cent higher at 140p on Wednesday, striking their highest level for two years.

Icahn Enterprises on Tuesday announced that the company reached a deal to sell Pep Boys to Mavis, one of the largest independent tire and service providers in the country, in a $700 million deal.

Pep Boys has nearly 800 locations around the country and offers auto services including tires, repairs, oil changes and maintenance.

The deal will expand Mavis’ presence in new and existing markets, particularly in the western U.S., where Pep Boys has a significant presence, and will increase Mavis’s network to over 4,400 service centers around the U.S. and Canada.

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Pep Boys is being acquired by Mavis in a $700 million deal with Icahn Enterprises. (Joe Raedle/Getty Images)

“Today’s announcement marks a significant milestone as Mavis continues to execute its growth strategy. Pep Boys is one of the most well-respected names in the automotive aftermarket, and we look forward to welcoming it into the Mavis family of brands,” said Mavis co-CEO David Sorbaro.

Sorbaro added that the deal “will create a stronger, more geographically diverse platform with the scale and capabilities to provide dependable service to even more customers and create meaningful opportunities for employees.”

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Icahn Enterprises chairman Carl Icahn touted the deal in a statement. (Adam Jeffery/CNBC/NBCU Photo Bank/NBCUniversal via Getty Images)

Pep Boys CEO Joe Auriemma said that, “For more than 100 years, Pep Boys has earned the trust of drivers across the country by delivering quality service with honesty and care,” adding that Mavis shares those values and its network will give Pep Boys the “scale, footprint, and operational and technological strength to continue building on its legacy as it enters a new chapter of growth.”

Carl Icahn, chairman of Icahn Enterprises, welcomed the deal and said that they “believe that the combined businesses will benefit greatly from the inevitable economies of scale and from the great experience of the Mavis team in the industry.”

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The deal would expand Mavis’ footprint in the Western U.S. (Fox News)

Under the deal, Icahn Enterprises will retain the real estate it obtained from Pep Boys, as well as the AAMCO Transmissions and Precision Tune Auto Care businesses.

Pep Boys was acquired by Icahn Enterprises in 2016, taking the auto service chain private in an all-cash $1 billion deal after it had been publicly traded.

Mavis operates other auto service brands including Midas, Tire Kingdom and Tuffy.

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The transaction is expected to close in the coming months.

Reuters contributed to this report.

Key earnings to watch also include those of oil marketing companies (OMCs) Bharat Petroleum Corporation (BPCL) and Hindustan Petroleum Corporation (HPCL), as escalating tensions in the Middle East continue to push oil prices higher.

Two Adani Group companies—Adani Green Energy and Adani Power—will be in focus as they announce their Q1 results today. Other prominent companies feature IndusInd Bank, Dr. Reddy’s Laboratories, HFCL, UCO Bank, Tata Communications, Waaree Renewable, Smartworks Coworking Spaces, NTPC Green Energy, Oracle Financial Services Software, JSW Energy, and IIFL Finance.

Recently listed Waterways Leisure Tourism, the operator of the Cordelia Cruises brand, is also scheduled to announce its maiden quarterly results as a listed company, alongside Aye Finance and several other firms.

The market reacted sharply on Wednesday to Q1 earnings announced a day earlier. Bandhan Bank shares plunged 10% to hit the lower circuit after the private lender cut its return on assets (RoA) guidance, citing an uncertain global macro environment and intensifying competition for deposits.

In contrast, Bajaj Auto and TVS Motor Company shares gained 3-4%, while Mahindra & Mahindra Financial Services surged more than 5% after posting their June quarter results.

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Zomato and Blinkit-parent Eternal is expected to report a steady June-quarter performance, with strong growth in quick commerce business likely to remain the main driver even as the food delivery business continues to expand at a slower but profitable pace.
Brokerages expect Eternal to benefit from higher order value in both food delivery and quick commerce. Blinkit is likely to see faster growth, helped by store additions, seasonal demand, IPL-related consumption and inflation-led basket expansion.Investors will watch Eternal’s commentary on competition intensity in quick commerce, Blinkit’s growth outlook, food delivery gross order value growth and margin trajectory.

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Mulberry has told Andy Burnham that scrapping the tourist tax would put more work through British factories, in the clearest sign yet that luxury manufacturers intend to test the new Prime Minister’s promise of growth beyond the M25.

Chief executive Andrea Baldo said restoring VAT-free shopping for overseas visitors should be ‘high on the agenda’ for the new Prime Minister, arguing it would support jobs across the country, including at the handbag maker’s own manufacturing hub in Somerset.

The intervention lands as Mulberry’s losses narrowed from £32.2 million to £8.9 million, after a turnaround refocused on the home market. Sales rose 4 per cent to £125.5 million for the 52 weeks to 28 March, from £120.4 million a year earlier. Shares rose 5.8 per cent to 145p on Wednesday morning.

Baldo said axing the tax, which hundreds of businesses including Primark, Harrods and Burberry have urged previous governments to scrap, would ‘unlock an opportunity…which helps all the cities of the UK.’ He pointed to Liverpool and Manchester as particular beneficiaries, as well as London.

That framing is pointed. Burnham has pledged to deliver ‘good growth in every postcode’ with policies shifting economic and political power away from Westminster, and has already used the tax system to signal intent, scrapping VAT on household electricity bills on his second day in office. Mulberry’s argument is that VAT-free shopping is a regional policy dressed up as a London one.

Why this matters beyond the West End

For smaller firms, the tourist tax debate has always been about supply chains rather than shop windows. One luxury brand’s UK sales support component suppliers, packaging firms, logistics operators and the hospitality businesses serving visiting shoppers well beyond Bond Street.

Rishi Sunak and Jeremy Hunt scrapped VAT-free shopping, which allowed overseas visitors to reclaim 20 per cent on purchases. HMRC withdrew the VAT Retail Export Scheme from 1 January 2021, arguing the relief was costly and concentrated in the capital. European countries charge VAT but refund it to overseas visitors taking purchases home, leaving Britain an outlier.

Luxury firms have long called the loss an own-goal, hitting the UK economy while boosting sales in Paris and Milan, with some shifting investment towards China rather than London. Retail bosses have pressed successive chancellors on the same point, without success.

The Treasury’s resistance has been backed by the numbers-keepers. The Office for Budget Responsibility reviewed its costing of the abolition and concluded the measure was ‘unlikely to affect significantly the productive capacity of the economy’, a finding retailers dispute but have yet to dislodge.

The manufacturing argument

Baldo’s pitch is not simply about till receipts. There was a ‘great advantage’ in being able to offer tourists products manufactured in Britain, he said. Mulberry’s bags are made in Somerset.

‘Tourism is a big part of our business that we have completely neglected because of the situation in London’, he added.

‘I am sure that if we can unlock that, then we’re just going to produce more because people love the UK manufacturing story, and that’s obviously so important. So it’s connected. It’s not just trading retail, but it’s really truly connected with Somerset and the factories.’

The domestic recovery has been driven by lapsed customers returning for summery raffia bags and new versions of flagship lines such as the Bayswater. The relaunched Roxanne, first popular in the 2000s and now fronted by Wicked actress Cynthia Erivo, has pulled in old fans and Gen Z shoppers alike.

‘More than half of our retail and digital sales came from returning customers, demonstrating that we are winning back former clients who already know and love the Mulberry brand and the importance of regaining relevance in our home market in order to grow internationally,’ Baldo said.

The turnaround has leaned on reviving the firm’s ‘cool Britannia’ image from the 2010s, when ‘It girls’ such as Alexa Chung paraded its products. Distribution has widened through more concessions in John Lewis and Selfridges, and Baldo says the brand has found a ‘sweet spot’ in the £800 to £1,200 price range.

For firms further down the supply chain, the lesson is portable: a credible British-made story is worth paying for, and the customers most likely to buy it are the ones you have already sold to once.

Jamie Young

Jamie Young is Senior Reporter at Business Matters, covering SME finance, employment law and Westminster policy since 2016. He has reported on every Budget and Autumn Statement since 2018, helped make sense of the ‘covid era’ and the bounce-back loan scheme from launch through the fraud investigations, and broke the magazine’s coverage of the 2024 late-payment reforms. He joined Business Matters straight from completing his BA in Administration from Exeter University and is NCTJ-qualified. Reach him at jyoung@cbmeg.co.uk

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OpenAI announced Tuesday that one of its advanced artificial intelligence models autonomously hacked into another AI company’s infrastructure during internal testing in what it described as an “unprecedented cyber incident.”

The company said AI startup Hugging Face detected and contained the breach last week after an AI agent compromised part of its infrastructure. The companies said they believe it may be the first publicly disclosed case of an AI model breaking into another company’s systems on its own during a controlled evaluation.

OpenAI said the breach took place during an internal evaluation of several of its models, including GPT-5.6 Sol.

OpenAI CEO Sam Altman acknowledged the incident in a post on X, writing that the company had “a significant security incident during evaluation of our models.”

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OpenAI disclosed that one of its advanced artificial intelligence models compromised another company’s systems during an internal cybersecurity evaluation, calling it an “unprecedented cyber incident.” (Anna Moneymaker/Getty Images / Getty Images)

“We consider this incident to be an unprecedented cyber incident, involving state-of-the-art cyber capabilities, and are responding accordingly,” OpenAI said in a news release.

The company said it was releasing preliminary findings to help security professionals better understand the capabilities of today’s AI models while the investigation continues.

OpenAI warned that increasingly capable AI models are accelerating the discovery and exploitation of software vulnerabilities.

“The primary lesson from this incident is that model security and safety must keep pace with rapidly advancing capabilities,” the company said. “We are strengthening the containment, monitoring, access controls, and evaluation practices used during model development.”

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OpenAI said one of its AI models compromised another company’s systems during internal testing, prompting a joint investigation with AI startup Hugging Face. (REUTERS/Dado Ruvic / Reuters)

Hugging Face co-founder and CEO Clem Delangue also addressed the incident in a post on X.

“We suspected last week’s cyberattack might have come from a frontier lab, given the sophistication of the agent. Turns out it did!” Delangue wrote.

“We’ve spent the past 24 hours working closely with the @OpenAI team (thanks!), and we strongly believe there was no malicious intent on their part,” he continued. “It’s quite mind-blowing that all of this happened autonomously! The investigation is ongoing, and we’ll share more learnings from what might be the first incident of its kind!”

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Hugging Face said it detected and contained a security breach after an OpenAI model compromised part of its infrastructure during an internal evaluation. (Jaque Silva/NurPhoto via Getty Images / Getty Images)

According to OpenAI, the incident took place during an internal evaluation designed to measure its AI models’ advanced cyber capabilities. Researchers disabled some built-in safety safeguards and ran the models in an isolated testing environment with limited internet access.

OpenAI said the models exploited an unknown software flaw to access the internet, then breached Hugging Face’s systems in an apparent attempt to find answers to a cybersecurity benchmark.

OpenAI’s security team detected the unusual activity while Hugging Face independently identified and contained the intrusion.

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Following the incident, OpenAI said it is implementing stricter security controls while vulnerabilities are patched and strengthening safeguards around future AI training and evaluations.