VAT-free shopping for tourists call

THE boss of luxury handbag maker Mulberry has urged the Government to reinstate VAT-free shopping for tourists as he warned wealthy shoppers are shunning London for Paris and Milan.

Thierry Andretta, chief executive of Mulberry, told the PA news agency that the Government’s move to end tax-free shopping in January last year has hammered trading in its high-end stores in the capital, particularly its Bond Street outlet.

It is compounding a slowdown in luxury spending as the cost-ofliving crisis begins to take its toll across all sectors, with the group revealing its UK retail sales plunged 10% in the group’s first half.

Shares in Mulberry tumbled as much as 28% after opening on Wednesday before paring back to stand around 11% lower as it revealed it swung to a half-year loss.

Mr 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 has been decimated to less than 5%.

“The wealthy are still buying but they’re not choosing to buy in London,” he added, saying it was also hurting hospitality and theatres in London as some tourists take their spending elsewhere,” he said. “(VAT-free shopping) is something we would like the Government to reinstate.”

VAT-free shopping for tourists was axed from January 2021. Former chancellor Kwasi Kwarteng brought it back it in the minibudget, before new Chancellor Jeremy Hunt reversed the decision.