Mulberry profits to be ahead of expectations

Luxury fashion group Mulberry has announced that profits and sales will be ahead of expectations as it recovers faster from the pandemic than first thought.

The company said the robust sales trend delivered in the six months to September has continued into the second half of its financial year.

Extra cash made will now be used to increase the fashion brand’s marketing and advertising spend to further build brand awareness, Mulberry said.

And even with the extra spending, profits will still be ahead of market expectations for the group, it added.

Gross margins on products have been maintained, having hit 69% last year, compared with 59% in 2020.

In November, the company revealed a 34% boost in sales to £65.7 million for the six months to September 25, with a £2.4 million loss turned into a £10.2 million pre-tax profit for the period.

Bosses have been focusing on full-price sales and moving away from discounting, as pandemic restrictions ended.

Asia has been a strong growth area for the brand, with rich shoppers from the Far East opting to spend cash locally instead of travelling to the UK and Europe.

Strong sales in the US also helped Mulberry’s post-Covid recovery and bosses said at the time that supply chain issues had been offset by stocking up on raw materials at its Somerset factories.