Asian expansion deal in the bag for Mulberry

Mulberry, the luxury brand, has agreed a new distribution agreement to sell its handbags and accessories in Japanese department stores.

The retailer has also extended a contract with the same partner to sell its products in South-east Asia for a further six years until 2021, including in the new countries of Australia and Vietnam.

However, shares in Mulberry fell by 95p, or nearly 7 per cent, to £13 yesterday, although they are still up by more than 44 per cent over the past year. Other luxury goods companies, such as Burberry, have seen their share prices hit in recently weeks over fears of slower spending among China's luxury consumers.

Mulberry said it had agreed "heads of terms" for a new distribution agreement for Japan via a joint venture vehicle owned by Club 21 and Mammina, a subsidiary of the department store group Isetan Mitsukoshi.

Under its contract extension with Club 21, the partner will open Mulberry flagship stores in Singapore, Hong Kong, Shanghai and Beijing.