British sustainable luxury brand Mulberry has reported an 8.4% decline in group revenue in the 13 weeks ending 30 December 2023 against the same period of the previous year.
The dip is attributed to tough macroeconomic conditions and a decrease in luxury consumer spending.
Despite the downturn, Mulberry upheld its strategy of maintaining full-price sales during the critical Christmas season.
Retail sales saw a slight decrease of 1.5%, though on a constant exchange rate (CER) basis there was a marginal increase of 0.6%.
International retail sales experienced growth of 3.9% and an impressive 10.8% on CER during the same period.
In the UK market, retail sales were down by 4.0%.
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For the 39 weeks ending on 30 December 2023, the group’s revenue showed a slight increase of 0.1% and a 1.3% increase on CER.
Mulberry expects its full-year performance to be affected by additional operational costs from new stores in Sweden and Australia and ongoing investments in technology.
Mulberry chief executive officer Thierry Andretta stated: “In the run-up to Christmas, the macro-economic environment continued to impact consumer spending in the luxury retail sector, which Mulberry was not immune from.
“Despite this, the group maintained its discipline and focus on a full-price strategy against an unusually high promotional environment. Our international sales remained positive, supported by our strategy to bring in-house ownership of overseas stores.”
Andretta warned of the hit the business was taking due to the lack of value-added tax (VAT)-free shopping in the UK.
The UK government ended tax-free shopping on 31 December 2020.
Andretta added: “In the UK, we continue to believe the lack of VAT-free shopping is impacting the retail landscape, as well as the hospitality, leisure and tourism sectors. Looking ahead, we are continuing to execute our plans and remain confident that our investments will underpin future sustainable growth.”