Profits upgrades in the bag as Mulberry sales soar
Friday 08 October 2010
The luxury brand Mulberry revealed that its underlying sales had rocketed by nearly 80 per cent since the summer, as well-heeled shoppers snapped up its celebrity-endorsed handbags.
In a trading update, Mulberry said its booming sales meant its full-year profits for the year to 31 March would "significantly exceed" market expectations. The brand, which has 40 UK stores, including department store concessions, said its star performing handbags were the Bayswater, Lily and Alexa, which sells for up to £795 and was named after the TV presenter Alexa Chung.
For the 10 weeks to 2 October, Mulberry said like-for-like sales in its full-price stores surged by 79 per cent – up from 44 per cent growth for the previous 10-week period.
Godfrey Davis, the chief executive of Mulberry, said its sales growth in Asia, particularly in South Korea, was outstripping the UK. "The wholesale business in Asia is growing at more than 100 per cent per annum," he said. Over the 10 weeks, sales at Mulberry's shops in the UK jumped by 57 per cent, boosted by visitors from China to its London stores.
Mr Davis said: "We are naturally slightly conservative but business is really good for us."
Mulberry said that its margins had jumped, thanks to it completing a higher proportion of sales at full price. The luxury brand also had fewer mark-downs as the booming sales left it with low stock levels for the summer sale.
Following the update, analysts at Altium Securities upgraded their full-year pre-tax profit forecasts for Mulberry from £9.7m to £13m.
On its prospects for the festive trading period, Mr Davis said: "There is clearly strong demand from consumers for our products. But I don't know what the consumer mood will be at Christmas."
Shares in Mulberry rose by 27.5p, or 7 per cent, to 440.5p yesterday.
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