British luxury fashion brand Mulberry notched up stronger than expected sales over Christmas and the new year and expects its full-year financial performance to be ahead of market forecasts.

During the Christmas week to December 27 and throughout January, the UK retail business recorded like-for-like sales up 30 per cent.

The performance marks a turnaround in performance by the leather goods and accessories retailer, which announced a profit warning for the year to March 31 at the time of its interim results. It blamed the slowdown in consumer demand and UK retail sales.

The group did not go in to Sale before Christmas and maintained margins as a result, it said in a statement. The level of markdown was controlled during the January Sale period.

The retailer added that sales slowed during the snowy period at the beginning of February but have improved again since.

Like-for-like sales over the past two weeks have been at “similar levels to the good figures achieved last year” it added. Sales were driven by the performance of the Mitzy collection of handbags.

It added: “Despite the strong trading in the UK since Christmas, the global economic outlook remains very uncertain and European and international partners are adopting a cautious approach to placing orders for the autumn 2009 season.”

The retailer will reduce stock and maximise cash flow and said that Mulberry is “well positioned, with a strong brand and balance sheet with no borrowings”.