British luxury goods company Mulberry says there is ‘no doubt’ economy has weakened – November 30, 2023 at 1:50 p.m.

(Alliance News) – Luxury goods maker Mulberry Group PLC on Thursday added to growing concerns among retailers about the weakness of the British economy, saying there was “no doubt” the business environment had deteriorated, hurting consumer confidence.

Bath, an England-based manufacturer of handbags and other leather goods, has also urged Westminster to reintroduce duty-free shopping in the UK.

Mulberry reported a pre-tax loss of £12.8m in the six months to September 30, up from £3.8m a year earlier. Turnover rose 7.4% from £64.9m to £69.7m, resulting in gross profit rising 4.5%, but other operating costs rose 21% from £48.6m to £58.9m.

Bank loans rose to £13.0 million as of 30 September, from £7.0 million the previous year. Raspberries don’t pay dividends.

Looking ahead, Mulberry said it is “well positioned” for the key holiday trading period and expects the usual weighting of operations in the second half of the year.

Mulberry confirmed it was continuing its direct-to-consumer strategy for its international operations, saying it now controls the full customer experience in Sweden, Australia, New Zealand and Japan. The company believes this will support future growth.

Speaking about the UK, CEO Thierry Andretta said: “There is no doubt… that the macroeconomic environment has deteriorated, and that has had a knock-on effect on consumer confidence.”

He added: “I continue to believe that introducing VAT-free shopping in the UK would be one of the most effective ways to boost business growth in this country. The fact that this has not been reintroduced means creating challenges for all sectors, impacting not just luxury players, But also hospitality, travel and tourism.

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Duty-free shopping has been halted following the end of the Brexit transition period in 2021.

Mulberry shares were trading 3.0% higher at 170.00 pence in London on Thursday afternoon.

By Tom White, Alliance News Editor

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