Luxury handbag retailer Mulberry has reported severe profit losses in the six months to September 30.
Mulberry posted a £500,000 loss its half year results, down from a £100,000 profit in the same period a year earlier.
However, sales in the same period showed healthy growth, as the brand’s new handbag collection boosted customer interest.
The retailer attributes losses to increased product investment and foreign exchange costs.
Retail sales climbed 10 per cent to £55 million in the first half of 2016, and like-for-like sales rose a similar seven per cent in the UK.
Following its recent failure to transition into the upmarket sector, Mulberry has cut its prices in order to win back a strong customer base.
READ MORE: Mulberry bags another set of strong results
“Mulberry‘s new collection under the creative direction of Johnny Coca has been well received by our existing customers and a new audience,” chief executive Thierry Andretta said.
“The new business announced today in north Asia will progress our strategy of developing our retail and omni-channel model in key luxury markets.”
Mulberry has now struck a deal with Challice, its majority shareholder in an effort to boost expansion in Asia, a key luxury market.
Brexit has reportedly been a key factor in the company’s mixed financial report acting as a double edged sword.
Although prices of raw materials and overseas franchises are more expensive, sales in the luxury sector have seen a sharp rise since tourists have been taking advantage of the weak pound.
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