Thursday, 14 June 2012

My thoughts on Mulberry shares falling 22.5% today


Mulberry Share Price / NatWest

Shares in Mulberry Group fell 22.50% today, officially closing at £15.60. This is of monumental proportions, nearly a quarter of their market value got wiped out in a day. The share price nose dive came on the back of Mulberry's financial results release: Profit was up 54% while sales were up 38% as compared to last year. Stellar results in light of current difficult trading conditions? Not according to analysts, who on average expected Mulberry's sales to be 2% higher than the reported £168.5m. This then sparked a massive knee-jerk reaction which led to the shares sell off, with some commenting that the China bubble is showing signs of bursting.

An analyst commented that the market might be over reacting. Mulberry, who was named as Top Fashion Stock of 2011 by Bloomberg, was expected to outperform the market and analysts' consensus. There was a lot riding on their shoulders, and I do agree this is a bit of an over reaction. I still believe there is massive potential for this brand, well positioned in the market and have barely scratched the surface of what they have to offer. They have really only done accessories and a small RTW collection.


And with that, I used the savings earmarked for furniture for my new flat, and bought a whole lot of Mulberry shares today. Guess I just have to sleep on the floor for a little longer. So help me out, there is a really good selection of Mulberry accessories online at Mr Porter (US) and Mr Porter International. Go buy something please?

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2 comments:

  1. very interesting post and how crazy all this stock market works and can easily fall in just a matter of few hours!! found the reading very very interesting. thanks!
    hopefully they will be able to make more value again and have a raise on their shares soon!

    http://thewild-swans.blogspot.com

    ReplyDelete
  2. mulberry is getting boring

    ReplyDelete

what's he wearing?