Mulberry reported its half-year earnings on Wednesday, announcing it had swung to a loss as it feels the effects of the cost-of-living crisis in the UK.

Mulberry shares have tumbled 21% on Wednesday so far.

The British luxury brand reported revenue was down 1% to £64.9 million. The group was severely impacted by its UK retail sales, which fell 10% to £34.1 million as the broader economic environment reduced consumer spending.

Despite the Covid restrictions in China, its retail sales increased by 6%, contributing to a 1% increase in Asia Pacific retail sales.

Any gains generated in this region, though, were insufficient, and the company reported swinging to a loss before tax of £3.8 million.

“We have delivered a resilient performance across the Group, supported by strong international demand and continued investment in the UK,” said Thierry Andretta, Chief Executive of Mulberry.

Looking ahead, Mulberry stated there was an improved trend in retail revenue for the eight weeks to 26 November, although uncertainty in the economic and geopolitical environment remains. As a result, the gross margin in the second half is expected to be maintained at first-half levels. In addition, further development in the UK is expected following its new store opening at Battersea Power Station on 14 October.

Andretta added, “looking ahead, we are confident in our ability to execute our strategy and to continue to invest across the Group for our future growth, in spite of the challenging economic and geopolitical backdrop. We are well placed for the festive trading period and will continue to drive the business forward to the benefit of all stakeholders.”