Mulberry bags boom in profits

Mulberry has trebled its half-year profits on the back of strong sales at home and abroad

Luxury handbag maker Mulberry shrugged off the economic gloom today as it trebled its half-year profits on the back of strong sales at home and abroad.

The group, which has 86 stores and concessions worldwide, including 44 in the UK, posted a 44% increase in like-for-like retail sales in the six months to September as customers took to the new autumn/winter collection.

John Cummins, analyst at Altium Securities, said there was more growth to come as Mulberry was "only just scratching the surface" in many luxury goods markets outside the UK and was under-represented globally.

The group, which plans to open nine new stores in the second half of the year, recorded pre-tax profits of £15.6 million, up from £4.7 million in the previous year, as total revenues rose 62% to £72.3 million.

Shares were 5% higher following today's results.

The group, founded in 1971, has benefited from seemingly insatiable demand for its goods, including its Alexa handbag, named after television presenter Alexa Chung.

The group has consistently shrugged off the consumer spending squeeze as demand for its products continues to grow unabated and it focuses its strategy on international expansion.

The company opened five new stores in the Asia-Pacific region in the first six months, as well as a flagship store in New York, in the fashionable Soho district.

Godfrey Davis, chairman and chief executive, said: "Our strategy to focus on international expansion continues to bear fruit. Against the backdrop of economic uncertainty, Mulberry continues to build market share internationally and we remain cautiously optimistic about the future prospects of the business."

The group has so far been unscathed by the eurozone debt crisis as sales on the continent surged 144% in the period, while US sales were up 82%.

Mulberry said its online sales were ahead 52% at £4.8 million, representing 7% of group sales, and it plans to upgrade its website by the end of the next financial year.

The company said current trading was holding up with like-for-like sales in the 10 weeks to December 3, which although slower than the first half rate of growth, was impacted by strong comparative figures in the same period last year.

Looking ahead, spring/summer 2012 already looks strong with orders up 29% compared with the whole of last summer.

PA