British brand Mulberry has reported an expected 28 per cent dip in pre-tax profit for the six months ended 30 September 2013 as the group continues to invest in international markets.
The brand, which has been known for its heavy reliance of celebrity endorsements, saw H1 revenue inch up 2 per cent to £78.1m and a rise in retail revenue of 6 per cent to £49.5m.
International retail sales shot up 29 per cent as the group says it is on track to open 15 new stores during 2013/14. A flagship Paris store on Rue Saint-Honoré is planned for next year which Mulberry will pay £9m up-front for.
Bruno Guillon, Chief Executive said its international sales was encouraging and added he was pleased with the acquisition of the Paris store.
“Located in a key tourist destination, this store will generate global visibility for the Mulberry brand,” he said.
Mulberry opened stores in North America, Germany and Austria, as well as China and Abu Dhabi in H1.
The group has been hit by a 16 per cent price hike in the luxury skins market in H1 which continues to be a concern to a brand mainly operating in the premium leather goods sector.
Anusha Couttigane, consultant at Conlumino, commented: “Mulberry’s brand appeal relies heavily on its ‘Made in England’ values. So, as much as its inbound figures are important, the company’s investment story is the real business driver.
“The completion of a second factory in Somerset in June 2013 is demonstrative of a management working hard to put in place the necessary building blocks to secure future growth.”
The results follow a 27.7 per cent pre-tax profit drop for the brand for the year ended March 2013.