Pre-Christmas sales at iconic Somerset-based fashion business Mulberry tumbled by more than 8% as the cost of living crisis forced shoppers to cut back on luxury spending.
Mulberry, best known for its top-of-the-range handbags, also blamed what it described as “challenging macro-economic backdrop” for the sales decline.
The firm, which has manufacturing sites at Chilcompton, south of Bath, and in Bridgwater, reported overall revenue down 8.4% in the 12 weeks ended 30 December.
UK sales dipped by 4%, with international sales coming in only marginally better at minus 3.9%.
Taking the longer 39-week period to 30 December, group revenue edged up by just 0.1% against the same period in 2022, with gross margins in line with those reported for the first half of the year.
In a trading update to the London Stock Exchange, the group said results for the full year would be impacted by the additional operational costs of new stores in Sweden and Australia and ongoing important investments – including technology – supporting future growth of the group.
Part of that investment was to improve its two West of England factories, which between them produce more than half of its output.
Mulberry chief executive officer 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.”
He said international sales had been supported by the group’s strategy of bringing ownership of overseas stores in-house.
“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,” he added.
“Looking ahead, we are continuing to execute our plans and remain confident that our investments will underpin future sustainable growth."
Mulberry was founded in 1971 by designer Roger Saul, who made leather belts and chokers on the family kitchen table.
Today it employs around 1,400 people across the globe and has offices in London, Paris, New York, Hong Kong, Tokyo and Seoul as well as its headquarters at Chilcompton.
