Mulberry shares jump after return to pre-pandemic sales levels

Luxury brand says its UK factories helped it avoid supply chain delays as it reports half-year revenue of £66m

Last modified on Wed 24 Nov 2021 06.05 EST

The handbag maker Mulberry has reported a return to pre-pandemic sales levels as it said its UK factories had allowed it to avoid the supply chain disruptions that have dogged some fashion rivals.

The British luxury brand reported revenue increased 34% to £66m in the six months to 25 September, compared with £49m in the same period in 2020. Half-year revenue was £69m two years earlier.

Mulberry had been a takeover target for the retail tycoon Mike Ashley after a difficult 2020 in which it cut one-quarter of its global workforce. But on Wednesday the company said UK sales had recovered strongly after the end of the last Covid-19 lockdown. Rising sales in Asia also made up for the loss of lucrative tourist traffic in its home market, it added.

Mulberry’s share price jumped by 24% on Wednesday morning to 375p, its highest since May.

The brand credited its UK manufacturing for avoiding shortages that have forced some fashion companies, including Germany’s Hugo Boss and Italy’s Benetton, to bring production closer to their home countries. Mulberry was “well placed” for the crucial Christmas period, its chief executive, Thierry Andretta, said.

The supply chain delays have been particularly problematic for fast fashion companies at the cheaper end of the market that rely on getting ever-changing designs to market quickly. The UK online retailer Asos said last month that the disruption would affect its profits, while Boohoo also warned about the impact of higher freight costs. Next and Superdry this month also cautioned about delays, which in Superdry’s case may be up to six weeks.

Mulberry said: “The combination of our UK factories, careful planning and agile supply chains has enabled us to successfully navigate the well-publicised difficulties in global logistics, with no impact on fulfilment to our sales channels.”

The sales recovery helped the company make pre-tax profits of £10.2m in the half year, compared with a £2.4m loss in 2020, although the 2021 figure included £5.7m from selling a lease in Paris.

Andretta said the company, which is listed on London’s Alternative Investment Market, had delivered “a strong financial performance”.

“The bold decisions we have taken with regards to focusing on our UK production capabilities, means that we are well placed for the festive trading period and beyond,” he said.

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