Strong sales of Lily handbags, Sadie satchels and Big Softie totes have boosted profits above expectations for Mulberry.
The British leather goods company said that robust sales in the first half of the year, which returned the business to profit, had continued in the second half, helped by shopping recoveries in Asia and Britain as coronavirus restrictions were eased.
Mulberry said that it was capitalising on its momentum and would increase spending on marketing to help to build its global brand awareness. Profits would still be “moderately ahead of current expectations” despite the additional spending, it said.
The UK accounts for the majority of sales, but Chinese retail sales grew by 38 per cent in the first half and are becoming increasingly important. Mulberry also has presences in South Korea and Japan.
The Somerset-based company said that its cash position was strong and it expected to close the year with more than £20 million on the balance sheet.
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Mulberry, founded in 1971 by Roger Saul, now employs about 1,200 people, including at its leather goods factory, The Rookery, in Somerset. Thierry Andretta, 64, its chief executive, has been trying to ensure that more of the brand’s sales are at full price after years of discounting in department stores.
Mike Ashley’s Frasers Group, which owns House of Fraser and is a key British retail partner, has a 37 per cent stake in Mulberry. Christina Ong, 74, the Singaporean retail and hotels tycoon, continues to be the largest investor, with a 56.14 per cent stake through her Challice vehicle, meaning that less than 7 per cent of the Aim-listed company is publicly traded.
Mulberry has focused recently on making more sustainable products, such as its “low-carbon” £1,295 oversized Lily bag, made with quilted Econyl regenerated nylon, and has a “Made to Last” manifesto for its leather bags.
The business also has launched a resale programme of “pre-loved bags” and is restoring 10,000 leather bags a year at its Somerset site.
The shares closed up 16p, or 5.5 per cent, at 306p.
