LONDON, United Kingdom — British luxury brand Mulberry reported a year to end-March loss of 14.2 million pounds ($18.4 million) but forecast reduced current year losses after seeing an improving sales trend since stores re-opened after COVID-19 lockdowns.

The group, best known for its leather bags, was struggling due to investment costs and a tough trading environment in its home market even before the pandemic hit.

After revenue fell 10 percent in the year to March 28, it was down 29% for the 26-week period to September 26, which Mulberry said was ahead of its early expectations. Online revenue was up 69 percent.

"However, we cannot escape the reality that British luxury and UK cities face a very uncertain future, hampered by necessary but dramatic social distancing measures and alarmingly low levels of footfall, as well as the pressures of high rents and business rates and the upcoming changes to tax free shopping," said Chief Executive Thierry Andretta.

Shares in Mulberry are down 42 percent so far this year. In June the group said it would shed a quarter of its workforce.

It is not paying a full year dividend given the uncertain outlook.

At the statutory level Mulberry's 2019-20 pretax loss was 33.7 million pounds. That reflected adjusting items of 33.7 million pounds - mainly asset impairments of 32.1 million pounds, largely resulting from the expected impact of the pandemic on future trading.

By James Davey; Editor: Sarah Young