Mulberry bags big profit jump amid Asia boom

The UK luxury goods maker is on fire - it's just tripled profits, and is expanding rapidly overseas.

by James Taylor
Last Updated: 19 Aug 2013
You'd have thought that in this age of austerity, discerning punters might balk at the prospect of frittering away £895 on a posh handbag. But not according to the latest results from Mulberry, the UK luxury goods maker. Its trendy Alexa bags are flying off the shelves not only in the UK but also in Europe, the US and, particularly, Asia. In fact, Mulberry says, it's had 'strong demand' for its products pretty much everywhere - so much so, in fact, that it can't make the stuff fast enough. We think that's what they call a 'high-quality problem'...

It's another impressive set of results from Mulberry, which is rapidly transforming itself from Somerset bag-maker into a global luxury goods brand. Sales were up 38% to £44.7m in the six months to September 30, while profits tripled from £1.5m to £4.7m. That's pretty good in itself - but things have got even better since: like for like sales were up 47% in the 10 weeks to December 4th, including a remarkable 66% jump in UK retail sales.

Mulberry still has more stores in Britain than anywhere else (44 - compared to 38 overseas). But not for long, by the looks of it. It's going great guns in the US, where sales are 'significantly ahead' of target and it's about to open a new flagship store in New York. But Asia and the Middle East could turn out to be the biggest money-spinner: Mulberry has just opened new stores in Hong Kong, Qatar and the UAE, while it's moving into South Korea and China in the next year. The two regions seem to have an insatiable appetite for British luxury goods, and Mulberry is well and truly cashing in. By this time next year, the majority of its shops will probably be overseas.

Still, with sales, margins and profits all up, and no sign of momentum slowing, the company is fast becoming one of UK plc's biggest success stories. Even if it's a bit hard for some of us to imagine who can afford to shell out this much cash on a lump of stitched leather.

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