London tourists and Asian expansion prop up Mulberry as losses widen

 
Alys Key
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Luxury Brand Mulberry's Profits Triple
The new Amberley bag has proved an instant hit with customers (Source: Mulberry)

International markets and tourists spending kept Somerset-based luxury bag maker Mulberry steady as it revealed a slightly deeper loss for the six months to 30 September.

The figures

Total revenue was almost flat at £74.6m, compared with £74.5m last year.

Losses before tax deepened to £609,000, compared with £515,000 in 2016. This was partly due to an increase in operating expenses, including a higher level of marketing and a £1.5m investment in the retail network.

While retail sales were up two per cent, like-for-likes declined by one per cent.

This was reflected in the UK market, where tourist spending in London helped push total sales up one per cent but like-for-likes dropped by the same amount as the rest of the domestic market weakened.

Shares in the company climbed over one per cent in early trading to 1,030p.

Why it's interesting

The British brand, which prides itself on producing half its bags in its Somerset factory, is increasingly looking overseas for growth.

Read more: Updated: Why shares in Burberry are down again

The company agreed a new venture with Onward Global Fashion to develop the business in Japan during the period, opening four new stores in key locations.

Meanwhile other stores have been relocated or opened in Hong Kong and China.

But there was some good news in the UK as well, which stabilised due to tourist spending in London, a trend which has boosted luxury retailers including department store Selfridges this year.

What Mulberry said

Chief executive Thierry Andretta said: "We are delivering on our strategy to grow Mulberry as a global luxury brand. Our international platform is taking shape and we have seen a successful initial trading period in Japan through our collaboration with OGF.

"Our focus on full price sales growth has delivered good results with new designs proving popular with customers. The Amberley bag, launched during June 2017, has already become a bestseller."

Read more: Mulberry gets a handle on its finances as profits jump

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