Mulberry profits hit by weak sterling

 
Emma Haslett
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Mulberry poached its finance director from Dyson earlier this year (Source: Getty)

Revenues were up in the first half of the year for luxury handbag brand Mulberry - but profits were dented by the weak pound, it said today.

The Somerset-based manufacturer said revenues rose 10 per cent to £74.5m in the 26 weeks to the end of September, up from £67.8m the year before - but it made a £500,000 loss before tax, adding that it expects a £1m hit from foreign exchange movements.

Like-for-like sales rose 10 per cent during the period - 12 per cent in its UK retail arm, boosted by tourist spending in London - but the figure just two per cent in its international retail arm. Digital sales rose 32 per cent, accounting for 14 per cent of group sales, from 12 per cent the year before.

Meanwhile, the company announced it had signed a new agreement with Challice to form a new business in China, Hong Kong and Taiwan. Mulberry will own 60 per cent of the new company, Mulberry Asia, it said.

Chief executive Thierry Andretta pointed to creative director Johnny Coca, saying this season's collection (including nine new bags) had been well received by both its existing customers and a new audience.

"We have strengthened our balance sheet with tight inventory management leading to strong cash generation, enabling us to invest in international development and new products," he added.

"The new business announced today in North Asia will progress our strategy of developing our retail and omni-channel model in key luxury markets."

Earlier this year, the company poached Dyson finance director Neil Ritchie.

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