Mulberry closes Bond Street store in response to VAT-free shopping removal
Premium accessory brand Mulberry has closed its Bond Street store, citing the axing of VAT-free shopping as a major factor in the decision.
Mulberry had previously been very outspoken about the impact of the government's decision to scrap VAT-free shopping. In December 2022, Mulberry CEO Thierry Andretta told the PA news agency that the Government’s move to end tax-free shopping had hammered trading in its high-end stores in the capital, particularly its Bond Street outlet.
Andretta said its Bond Street store, which has sky high rents and business rates, used to see up to 50% of sales from international tax-free shoppers, but this had been decimated to less than 5%.
He commented: “Some wealthy people now prefer to go shopping in Paris or Milan or other capitals – it’s really hitting us. The wealthy are still buying but they’re not choosing to buy in London. (VAT-free shopping) is something we would like the Government to reinstate.”
VAT-free shopping for tourists was axed from January 2021, only for former chancellor Kwasi Kwarteng to reintroduce it in the disastrous mini-budget, before new Chancellor Jeremy Hunt made another U-turn and reversed the planned reinstatement.
Mulberry also said high business rates and rents had made the 5,442 sq ft store “commercially unviable”. The company said there would be no redundancies due to the closure and staff would be redistributed to other locations.
A Mulberry spokesperson said: “The lack of VAT-free shopping in the UK has been particularly felt on Bond Street, which has always been an iconic shopping destination for tourists. The decline in visitors has impacted footfall and sales, which taken together with the high business rates and rents has made the store commercially unviable resulting in us taking the difficult decision to close this store.
“We are pleased to say that there will be no redundancies and all colleagues are being redeployed across our London store network. Customers can continue to shop on our website or visit our other stores, including our flagship store on Regent Street. We hope that we are able to open another Bond Street store in the future.”
Mulberry swung to a pre-tax loss of £3.8 million for the six months to 1 October against profits of £10.2 million in 2021.
Mulberry saw UK retail sales drop 10% to £34.1 million, with trading in the second quarter particularly impacted as the economic uncertainty and cost crisis knocked shopper confidence, with the lack of VAT-free shopping also taking its toll.