Mulberry hit by squeeze on luxury consumer spending

Luxury handbag maker Mulberry saw revenues fall by 8.4 per cent in the last three months of the year as the squeeze on consumer spending continues to bite.

The Somerset firm published a trading update for the last 13 weeks of the year.

Group revenue in the period was down 8.4 per cent as result of the challenging macro-economic backdrop and decline in luxury consumer spending.

In the run up to Christmas, the Group maintained its full price sales approach.

The biggest drop came in UK retail sales but international sales were also affected.

Group revenue for the 39 weeks ended 30 December 2023 was up marginally versus the prior year, with gross margins in line with those reported for the first half of the year.

The company said results for the full year will be affected by the additional operational costs of new stores in Sweden and Australia and ongoing important investments, including technology, supporting future growth of the group.

Chief executive Thierry Andretta said: “In the run up to Christmas, the macro-economic environment continued to impact consumer spending in the luxury retail sector, which Mulberry was not immune from.

“Despite this, the group maintained its discipline and focus on a full price strategy against an unusually high promotional environment.

“Our international sales remained positive, supported by our strategy to bring in-house ownership of overseas stores. In the UK, we continue to believe the lack of VAT-free shopping is impacting the retail landscape, as well as the hospitality, leisure and tourism sectors. Looking ahead, we are continuing to execute our plans and remain confident that our investments will underpin future sustainable growth.”