Mulberry sales grow but losses widen amid tough trading conditions

British luxury house Mulberry achieved a 7% uplift in revenue to £69.7m in the six months to 30 September but losses before tax widened to £12.3m (2022: £2.8m) amid challenging trading conditions.

Mulberry's UK retail sales increased 6% to £36.2m despite the "broader economic environment", while International retail sales increased by 34% to £23.5m.

The US increased by 38% (42% CER) due to increased brand awareness while Asia Pacific retail sales (including the first full period of ownership of its Australian stores) increased by 13%. However Underlying retail sales in the market decreased by 7% (3% CER) due to the "challenging China macro-economic climate and reduced footfall across the region".

The increased losses overall were due in part to £3.3m in Software as a Service (SaaS) costs, the additional operational costs of new stores in Sweden and Australia, and "additional important investments for future growth in the Group", the company said.

CEO Thierry Andretta commented: "Against a challenging macro-economic backdrop, which is impacting the entire luxury landscape, we have continued to invest in our long-term future.

"Our strategy to transform our international businesses to a direct-to-consumer model has enabled us to control the entire customer experience in Sweden, Australia, New Zealand and Japan. Our investments in the period in our digital systems, stores and product will power future growth. 

"As one of the most iconic British luxury brands, product innovation remains at the heart of Mulberry. Our recent product launches, the Islington, Pimlico and Lana have been well received by customers, which is testament to our heritage, fresh designs and modern craftsmanship.  

"Looking ahead, we are well placed to capitalise on the important festive trading period and expect the usual second half weighting to trading.

"There is no doubt, however, that the macro-economic environment has deteriorated, and this has had a knock-on effect on consumer sentiment. At Mulberry we have ensured that we are prepared to navigate this tricky environment, and we are confident in our ability to continue to execute our strategy. I continue to believe that offering VAT-free shopping in the UK would be one of the most effective ways to encourage business growth in this country. The fact this has not been reinstated is creating challenges for all sectors; impacting not only the luxury players, but also hospitality, travel and tourism. As we look ahead to the New Year, I urge policy makers to collaborate with all industries campaigning on this issue and reconsider implementing this to support businesses across the UK."