Luxury fashion brand Mulberry flourishing

Feb 18 2010 by Iain Laing, The Journal

LUXURY fashion brand Mulberry has given further signs that consumers were defying the economic gloom as it said annual profits would smash expectations.

The retailer, whose handbags sell for up to £3,000, said it had continued to trade strongly since early December, particularly during the Christmas period.

Mulberry said the launch of its new Alexa handbag range – named after the “modern British style icon“ television presenter Alexa Chung – had generated demand from both retail and wholesale customers.

Chief executive Godfrey Davis said the firm had shown no sign of slowing despite the economic uncertainty that has gripped much of the high street.

He said demand throughout the year continued to grow and had exceeded expectations.

“A year ago things were looking quite depressing,” he said. “In our business it’s just been a very strong year.”

Mr Davis added the financial worries had “not been apparent in our sales”.

“Would we have done more if there had not been the economic uncertainty? Maybe we would,” he said.

He said sales growth was around 20% this year, adding “that is not really a recessive sales pattern“.

Christmas trading was normal and while the firm saw its January sales slow, this was because it reduced the amount of stock in the seasonal promotions so margins were up.

Pre-tax profits were up 16% to £1.5m in the six months to September 30, on revenues 16% higher at £32.3m.

Previous estimates for the full year had been around £4.5m, but it is now expected the firm will report profits closer to £6m.