Whitbread, Mulberry Are Latest Victims of Weak U.K. Economy

(Bloomberg) -- U.K. hotel operator Whitbread Plc and leather-goods maker Mulberry Group Plc reported lower sales in their home market as the uncertainty around Brexit erodes business prospects.

Whitbread said Wednesday that first-quarter comparable sales dropped 3.7%. Mulberry reported U.K. revenue fell 6% in the year through March, driving it to a 5 million-pound ($6.3 million) pretax loss.

The reports add to a litany of U.K. business woes as Brexit and a shift to online shopping hit retailers, with store owners such as House of Fraser and Debenhams Plc resorting to insolvency procedures. U.K. retail sales plunged 2.7% in May, the biggest drop since at least 1995 when excluding Easter distortions.

Whitbread shares fell as much as 2.2% in morning trading. The hotel operator said the political uncertainty affected business travel at its Premier Inn chain. While the company is opening more rooms in London, it said it’s cautious about the outlook for travel elsewhere in the U.K.

Mulberry said its business was disrupted as House of Fraser, a department-store chain, went into administration before being acquired by billionaire Mike Ashley’s Sports Direct International Plc. The company has reduced the number of House of Fraser locations it works with to 15 from 19.

“There’s more and more closures on the high street,” Chief Executive Officer Thierry Andretta said by phone. “It’s a challenging market.”

The brand is “keen” to work with House of Fraser, though the company is waiting for the chain to disclose which stores it will close and which it will refurbish.

The stock fell as much as 1.3%, bringing its drop over the past year to 64%.

To contact the reporters on this story: Thomas Mulier in Geneva at tmulier@bloomberg.net;Ellen Milligan in London at emilligan11@bloomberg.net

To contact the editors responsible for this story: Eric Pfanner at epfanner1@bloomberg.net, John Lauerman, John J. Edwards III

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