30th Nov 2023 12:49
(Alliance News) - Luxury goods firm Mulberry Group PLC on Thursday added to the growing alarm among retailers about weakness in the UK economy, saying there was "no doubt" the business environment has deteriorated, hurting consumer sentiment.
The Bath, England-based maker of hand bags and other leather goods also urged Westminster to reinstate duty free shopping in the UK.
Mulberry reported a GBP12.8 million pretax loss in the six months that ended September 30, widened from GBP3.8 million a year before. Revenue rose by 7.4% to GBP69.7 million from GBP64.9 million, lifting gross profit by 4.5%, but other operating expenses grew by 21% to GBP58.9 million from GBP48.6 million.
Bank borrowings rose to GBP13.0 million as of September 30 from GPB7.0 million a year before. Mulberry pays no dividend.
Looking ahead, Mulberry said it is "well placed" for the key festive trading period and expect its usual second-half weighting to business.
Mulberry highlighted that it is pushing ahead with its direct-to-consumer strategy for its international business, saying it now controls the entire customer experience in Sweden, Australia, New Zealand and Japan. This will support future growth, it thinks.
Turning to the UK, Chief Executive Officer Thierry Andretta commented: "There is no doubt...that the macro-economic environment has deteriorated, and this has had a knock-on effect on consumer sentiment."
He added: "I continue to believe that offering VAT-free shopping in the UK would be one of the most effective ways to encourage business growth in this country. The fact this has not been reinstated is creating challenges for all sectors; impacting not only the luxury players, but also hospitality, travel and tourism."
Duty-free shopping was halted after the end of the Brexit transition period in 2021.
Mulberry shares were up 3.0% at 170.00 pence in London on Thursday afternoon.
By Tom Waite, Alliance News editor
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