Mulberry's chairman and chief executive, Godfrey Davis, remains cautious about the outlook for the luxury global fashion brand, despite it posting barnstorming sales for the past year that bucked the gloom in the fashion sector.
"If it was not for the current economic climate I would be very bullish about our prospects, but as it is I am cautious," Mr Davis said.
For the first 10 weeks since 31 March, Mulberry said its like-for-like wholesale order book and UK retail sales were up a stunning 17 per cent. This follows a 14 per cent uplift to £51.2m for its full-year.
Mr Davis attributed the most recent sales uplift to its hefty investment in marketing and product design and development. "The consumer is keen to buy our products and that is really the result of the long-term effort on product design and development," he said.
He added: "We offer fair value. Although you may say that £400 to £500 for a handbag is quite expensive, they are stylish and people have their Mulberry handbag for a number of years. Customers see them as an investment because the product has longevity." Its UK retail sales grew by 29 per cent for the year to March 31.
However, the luxury brand ramped up its marketing spend by £2.1m to £4.8m, which dragged down its full-year pre-tax profits. For the 12 months to March 31, Mulberry delivered a pre-tax profit of £5.2m, compared with £6.2m a year earlier. Its operating expenses soared by £6.2m to £25.8m over the year. The luxury brand has 71 stores, which comprise those owned by the company and those operated by franchisees; it also sells products in department stores, including Harrods, Harvey Nichols and Selfridges. Its company-owned stores account for about 55 per cent of its total sales.
This year, Mulberry will open another UK store in London's White City development. It will also unveil three Middle Eastern stores – in Dubai, Jeddah and Kuwait – before Christmas, as well as two more shop-in-shops in Korean department stores via its partner in that country.
Mulberry will launch a line of women's shoes in its Mulberry shops this autumn, which will be restricted to its own stores for the first two or three seasons.