Mulberry bags profits increase of a fifth, boosted by falling value of pound

● Luxury goods retailer’s fortunes in contrast with those of rival Burberry

Luxury handbag maker Mulberry has reported rising full-year profits, helped by an increase in tourists taking advantage of the weak pound.

The company said pre-tax profits in the year to 31 March rose by about a fifth to £7.5 million, while revenue was up 8 per cent to £168.1m.

Like-for-like UK retail sales increased by 5 per cent in the period, and Mulberry said that in the ten weeks to 3 June comparable sales grew 2 per cent in Britain, helped by tourist spend.

“In the UK, like-for-like sales… continue to benefit from an increase in tourist spending in London, although domestic demand has been softer,” the group said.

Revenue from digital channels increased by 19 per cent to represent 15 per cent of group revenue, up from 14 per cent in the prior year. The firm last year launched the first collection under recently-hired creative director Johnny Coca, with nine new bags, including a revamp of its best-selling Bayswater design.

The “Zipped Bayswater” bag has become an immediate bestseller since its launch in October, Mulberry said.

Chief executive Thierry Andretta said: “During the year we have made good progress.

“Our sales and profits are growing, enhancing our strong cash position. We have advanced our international growth strategy with a new partnership in Asia and the continued expansion of our omni-channel offer in key markets.”

“We have generated strong creative momentum with new products that are wellreceived by our existing and new customers.

“Looking ahead, we will continue to invest in advancing our international development and increasing Mulberry’s relevance to our customers’ rapidly evolving lifestyle.”

The group has staged a bounce-back over the past two years after seeing profits hammered as it attempted to move upmarket and compete with the likes of Gucci and Dior.

Mulberry’s latest results contrast with those of luxury fashion firm Burberry, which last month revealed underlying annual profits fell by more than a fifth as it was hit by weak wholesale trading in the US. Mulberry last year announced a deal to grow in Asia with its majority shareholder Challice, a company run by Singapore billionaire Christina Ong and her family.

To this end, Mulberry opened new stores in Shanghai and Hong Kong earlier this year. The retailer said it had 67 directly operated stores altogether at the end of March.