The boss of Mulberry has warned the abolition of tax-free shopping for overseas visitors is damaging Britain and benefiting Europe.
Thierry Andretta said businesses in the UK are suffering as wealthy American and Middle Eastern tourists flock to the Continent to shop.
The comments came after Rishi Sunak and Jeremy Hunt scrapped VAT-free shopping, which allowed overseas visitors to claim back 20 per cent on purchases.
While countries in Europe charge VAT, they also offer a refund for overseas visitors taking purchases home.
There is growing unease that the loss of the tax break in Britain is a major own-goal, with the so-called tourist tax hitting the UK economy while boosting sales in Paris, Milan and beyond.
Iconic: Model Alexa Chung (pictured) designed a range of Mulberry handbags. But the luxury firm says Britain is losing out because of the so-called tourist tax
Announcing an otherwise upbeat set of results yesterday, Andretta said: ‘British brands, British luxury, British retail and British hospitality are all suffering as a result of the UK’s lack of tax-free shopping for tourists, to the benefit of our European counterparts.
‘We urge the Government to look at the luxury sector’s contribution to the broader economy of the UK and to reconsider the position on tax-free shopping for tourists as a priority.
‘If we want British brands to invest, grow and create more jobs we need a level playing field with Europe.’
The brand shut its flagship Bond Street store in February, citing lacklustre levels of tourists after the Government ended its VAT-free shopping scheme.
But it has become the latest luxury brand to cash in on enthusiasm for expensive handbags.
Business was better than expected thanks to uplifts in the UK and China despite a ‘challenging’ economic landscape.
Wealthy shoppers forked out for handbags such as its Alexa satchel, which costs £1,250. Fashion houses LVMH and Hermes have also seen roaring sales.
Group sales were ‘slightly ahead of last year’, boosted by ‘an improving environment’ in China, thanks to the shredding of Covid curbs last year, the London-listed firm said.
Asian shoppers have been especially keen to purchase tiny bags, which sell for hundreds of pounds.
A new quilted Softie bag, which costs a whopping £1,750, was ‘a particular prize’ among Chinese shoppers, according to retail analyst Wizz Selvey.
Chinese consumers ‘love to parade luxury British and European brands, with key products being accessories, particularly handbags,’ helping brands including Mulberry and Hermes cash in, Selvey added.
