Luxury fashion and accessories retailer Mulberry has reported deepening losses despite booming revenue internationally as it continues to invest in its “long-term future”.
Mulberry posted a loss before tax of £12.8m for the 26 weeks to September 30, 2023, compared with a loss before tax of £3.8m during the same period last year.
Group revenue increased 7% year on year to reach £69.7m, up from £64.9m.
Sales in the UK during the period were up 6% to £36.2m despite the impact of the “broader economic environment”.
Retail sales in the US and Asia-Pacific regions increased by 38% and 13% respectively, while international retail sales were up by 34%, which the retailer attributed to its strategy to bring “in-house ownership of overseas stores”, including both Sweden and Australia.
Mulberry credited its “increased brand awareness” during the period to collaborations with the likes of Paul Smith, Axel Arigato and Stefan Cooke.
In terms of outlook, Mulberry said it remains “confident” in its ability to navigate uncertain macro-economic conditions as a result of its “clear customer proposition and plan for growth”.
It also emphasised being “the best value price point in the luxury market” and added that it is “prepared” for the second half of the financial year and the peak festive trading period.
With an eye to shopping in the UK, chief executive Thierry Andretta emphasised that the return of VAT-free shopping would be “one of the most effective ways” to boost business growth in the country.
He called on policymakers to “reconsider” implementing it to support businesses across the market.
Andretta said: “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 policymakers to collaborate with all industries campaigning on this issue and reconsider implementing this to support businesses across the UK.”