Mulberry Group, the renowned British luxury fashion brand, recently released its trading statement for the 13-week period ending on December 30th. The report revealed a decline in sales but also highlighted some positive aspects amidst a challenging market.

Compared to other luxury brands that have been struggling in recent months, Mulberry seems to be in a relatively better position. Its retail sales experienced a moderate drop of 1.5%, which is commendable given the circumstances. In fact, when factoring in constant exchange rates, there was a 0.6% increase in sales. However, the UK market proved to be a challenge, with a 4% decline in retail sales. This can be attributed to the ban on VAT-free sales for tourists, which has significantly impacted the shopping scene in the country.

On the international front, Mulberry witnessed a 3.9% increase in retail sales, and an impressive 10.8% increase when accounting for constant exchange rates. While these figures do present a positive picture, the overall group revenue for the period experienced an 8.4% decline, or 6.6% when excluding exchange rate fluctuations. This clearly indicates that Mulberry is facing tough times, as challenging macroeconomic conditions and a decline in luxury consumer spending negatively affect its performance.

Despite the difficulties, Mulberry stayed committed to its full-price sales approach during the Christmas season. Looking at the financial year as a whole, the group’s revenue for the 39-week period ending on December 30th showed a slight increase of 0.1%. Gross margins remained consistent with those reported in the first half of the year.

However, Mulberry anticipates that its full-year results will be impacted by additional operational costs associated with new stores in Sweden and Australia, as well as ongoing investments in technology to support future growth.

CEO Thierry Andretta acknowledged the impact of challenging market conditions on consumer spending within the luxury retail sector. He highlighted the positive performance of international sales and the company’s strategy of bringing overseas stores in-house. Regarding the UK, he expressed his belief that the lack of VAT-free shopping is not only affecting the retail landscape but also impacting the hospitality, leisure, and tourism sectors.

Looking ahead, Mulberry remains focused on executing its plans and is confident that its investments will drive sustainable growth in the future. Despite mixed results in the Golden Quarter, the brand is determined to navigate the challenges it faces and emerge even stronger.

Useful links:
1. Mulberry Official Website
2. Mulberry jeopardizes UK retailers – Bloomberg