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Mulberry reports “positive Group performance” for the fiscal year ending 2023

Chloe Burney
28 June 2023

Mulberry Group, the British luxury brand best known for its leather accessories, has reported that its revenues were up during the 52 weeks that ended 1 April 2023 after engaging its “Made to Last Manifesto” – ensuring sustainability remains central to its strategy.  

Overall, during the fiscal year, revenues were up 4% to £159.1m, compared to £152.4m the year prior. In the UK, retail sales remained flat at £87.7m (2022: £88.5m). The first half of the year was impacted by the broader economic environment, however, performance picked up during the second half.

The group maintained gross margins of 71.2%, with full price retail sales increasing by 6% and representing 78% of total retail sales. Reported profit before tax stood at £13.2m, which was significantly down from £21.3m the year prior.

Mulberry CEO Thierry Andretta commented: "We have delivered a positive Group performance this year thanks to our unique brand identity, beautiful innovative products and market-leading omni-channel proposition. 

“We have made significant investments in the Company this year, as well as expanding our direct-to-customer model with the recent acquisitions of businesses in Sweden and Australia.”

In terms of omnichannel growth, digital sales represented 30% of the group’s revenue. This stood at 24% in 2020, reflecting this sector’s ongoing growth.

The group focused its efforts in becoming more sustainable. Now, 100% of all of its leather, suede and nappa is sourced from tanneries with environmental accreditations. What’s more, Mulberry’s Made to Last manifesto continues to set the company apart. With this, it is currently on track to reach its aim of zero carbon emissions by 2035.

Andretta added: “Our Made to Last Manifesto also continues to set us apart and ensures that sustainability remains central to our strategy, with our ambition to transform to a regenerative and circular model across our supply chain by 2030 firmly on track.  

“We made further progress during the period, reaching our target of sourcing 100% of our leather from tanneries with environmental accreditations including Leather Working Group and Sustainable Leather Foundation while all other materials and packaging used remain fully sustainable and recyclable.  We continued to expand our circularity programme offering our pre-loved bags in the UK and Europe and restoring over 10,000 bags every year.”

The latest performance marked an improvement after UK sales dropped 10% in the first six months of the year, 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.

Andretta has warned that UK sales are being impacted as wealthy shoppers shun London for Paris and Milan due to the tax hit. The group announced in February that it was closing its Bond Street store due to a “dramatic” drop in customers and sales after the removal of VAT-free shopping. It redeployed all staff from the Bond Street store across its remaining London shops.

Costs associated with the closure of the Bond Street store contributed to the profits fall, as well as a 26% jump in operating expenses. This included a 9% hike in staff costs and investment in new stores in Sweden and Australia.

Dee Corsi, Chief Executive at New West End Company and Chair of the Association of International Retail backed Andretta's comments on the negative impact of the lack of VAT-free shopping:"The tourist tax is a drag on our economy, undermining the home advantage of great British brands. In contrast to what the Treasury claims, data from VisitBritain shows nearly half of long-haul travellers see shopping as one of their priorities. The West End and its retailers have been recovering strongly since the pandemic, but until this misguided tax is removed we'll be letting opportunity slip through our fingers."

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