Mulberry Group sales improved in the second half of its financial year, partially thanks to booming luxury goods demand on the reopening of the Chinese economy.
The group, which is known for its luxury handbags, slumped to a loss in the first half the year following a downturn in digital purchases in Britain amid a worsening retail backdrop.
But Mulberry told investors on Thursday in an update ahead of its results for the year to 1 April that profitability had been ‘weighted to the second half’ with revenue ‘slightly ahead of last year’.
Mulberry Group is known for its luxury handbags
Mulberry said: ‘The group has seen an improvement in retail revenue over the second half compared to the first half of the year, driven by a good performance in the UK and an improving environment in China over recent months, underpinned by our direct-to-customer model.’
Luxury brands such as LVMH and Burberry have been reporting bumper demand in recent months on the re-emergence of the Chinese consumer following strict lock-downs in the country.
Mulberry told investors it had made further investment in the Asia Pacific and Greater China regions in the second half.
Ben Laidler at eToro said: ‘The Chinese economy is strongly reopening after three years of covid lockdown. This is an important offset to the slowing economies in the rest of the world and a key boost to many UK and European companies.
‘The resurgent Chinese consumer has powered the continued outperformance of Europe’s luxury goods sector.’
On other strategic developments, Mulberry said it had been able to maintain gross margins due to a focus on full price sales, while it had also made further investments in ‘sustainable innovation’ and new stores in Australia.
It added: ‘The group continued to invest in its global brand awareness and the development of its business model during FY23 and remains focused on investing for future growth.’
Net cash was around £800,000 as of 1 April, ‘with further headroom available’ under the group’s borrowing facilities, according to Mulberry.
Mulberry Group shares jumped 8 per cent to 243p by midday, paring losses to 17.6 per cent over one year.
Thierry Andretta, chief executive, said: ‘This year we have continued to deliver on our strategic objectives while demonstrating resilience in the challenging macro-economic environment.
‘We’ve invested in our omni-channel approach, improved our direct-to-customer-model and maintained gross margin.’
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