// Mulberry posts 4% full year revenue increase to £159.1m despite pre-tax profits slumping
// Pre-tax profits fell 38% to £13.2m, in part due to costs linked to the Bond Street closure
Mulberry’s pretax profit slumped in the year, despite group revenue rising by 4% to £159m, as increasing costs weighed on performance.
In the year to April, the luxury handbag retailer reported an underlying profit before tax of £2.5m, down from £14.6m last year as sales slipped to £87.7m from £88.5m.
Pre-tax profits fell 38% to £13.2m, in part due to costs linked to its Bond Street store which shuttered back in February. The firm said its first half of the year was impacted by the broader economic environment, however performance improved in the second half.
Chief executive Thierry Andretta told the Evening Standard there is “no doubt” the loss of VAT-free shopping is weighing on the company’s UK performance, as its Asia Pacific arm saw sales rise 3% and the wider international sales saw a 12% boost.
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He noted Mulberry had made “significant investments”, including its expansion in Sweden and Australia. “We are well set for the year ahead with the right strategy in place to deliver on our growth plans,” he said.
The business said its lower profit reflected higher expenses, which increased 26% year-on-year as it faced an extra £3.8m on last year from its expansion into Sweden and Australia while staff costs increased 9% to £44.2m.
Andretta said: “We have delivered a positive Group performance this year thanks to our unique brand identity, beautiful innovative products and market-leading omni-channel proposition.”
Earlier this year, reports suggested Mike Ashley, who owns a 37% stake in the retailer, was attempting to force his way onto the board.
Ashley was said to be frustrated with Mulberry’s low sales and lack of transparency around its poor performing Asian business.
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