Luxury retailer Mulberry is looking to Asia and the US to boost future growth after reporting a 28% slump in pre-tax profits for the full year to March 31.
Revenue was down 2% to £165.1m.
The decline comes despite an 8% sales rise in the Somerset-based company’s retail division, which reported revenue of £107.2m. This compares to a 36% rise last year and comes against a “challenging” environment in the UK and Europe, and reduced tourist spend.
Retail sales in the UK rose by 6% to £91.8m while international retail sales increased by 20% to 15.4m. Sales from its online operation were up by 21% to £17.6m. Group retail sales for the first 10 weeks of the new financial year are 9% ahead of the same period last year.
Mulberry opened 17 new international stores, including a Singapore flagship plus stores in Shanghai, Beijing and Bahrain, over the year. A further three stores have opened since the year end and up to 20 are planned for the 2013/14 financial year. It has 115 shops globally, including directly-owned and partner stores.
Meanhwile, it has also invested in a second UK factory, which opened in June 3, and completed a review of its supply chain. It aims to implement a new integrated ordering timetable by the end of the financial year ending March 21, 2015.
The company has also consolidated its Middle East franchise business, appointing Chalhourb Group to operate on its behalf in the region and accelerate new openings.
The growth in retail was offset by a 16% decline in its wholesale business, due to a rationalisation of accounts in Europe and some destocking across Asia.
Mulberry has carried out a number of product initiatives which will come through for autumn 13, including introducing additional leather and colour offers in the core and entry level women’s bags, a wider range of accessories, and a 50% increase in men’s accessories.
Mulberry warned the outlook remained difficult for the coming year, particularly given its reliance on the UK and European markets, but it added that it will “continue to take the necessary stop to build its business in the US and Asia” through new openings and by investing in marketing that will highlight the brand’s craftsmanship and heritage.