Mulberry’s pretax profit slumped in the year, despite an uptick in revenue, as increasing costs weighed on performance.
In the year to April, the luxury handbag maker reported an underlying profit of £2.5m, down from £14.6m last year. On a reported basis its pretax profit was £13.2m, which took into account impairment reversals on some of its London stores.
The sharply lower profit reflected higher expenses, which increased 26 per cent year-on-year. Mulberry faced an extra £3.8m on last year from its expansion into Sweden and Australia while staff costs increased nine per cent to £44.2m.
Last year, the firm also benefitted from £3m in Covid-related business reliefs which were not available this year.
These increases wiped out a four per cent rise in revenue, driven mainly by sales growth outside the UK and Asia-Pacific. In the UK revenue fell one per cent with a sales slower in the first half of the year in particular.
Revenue in the first 12 weeks of this year is six per cent ahead of last year and Mulberry noted that its stores in Sweden and Australia performed well. Retail sales in the UK are in line with last year.
Chief executive Thierry Andretta said: “”We have delivered a positive Group performance this year thanks to our unique brand identity, beautiful innovative products and market-leading omni-channel proposition.”
He noted Mulberry had made “significant investments” including its expansion in Sweden and Australia. “We are well set for the year ahead with the right strategy in place to deliver on our growth plans,” he said.
Earlier this year, reports suggested Mike Ashley, who owns a 37 per cent stake, was attempting to force his way onto the board. Ashley was said to be frustrated with Mulberry’s poor sales performance and a lack of “transparency” around its Asia business.