Decline in luxury spending impacts Mulberry's Q3

Mulberry Group revenue for the 13 weeks to December 30, 2023 was down 8.4 percent or down 6.6 percent on CER versus the prior year period.

The company said in a statement that the performance was impacted by the challenging macroeconomic backdrop and decline in luxury consumer spending. In the run up to Christmas, the group maintained its full price sales approach.

Commenting on the trading update, Thierry Andretta, the company’s chief executive officer, said: "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.”

The company’s retail sales for the quarter dropped by 1.5 percent but increased by 0.6 percent CER including international retail sales growth of 3.9 percent or 10.8 percent CER and UK retail sales decline of 4 percent.

“Our international sales remained positive, supported by our strategy to bring in-house ownership of overseas stores. 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," added Andretta.

Group revenue for the 39 weeks was up 0.1 percent or 1.3 percent on CER versus the prior year, with gross margins in line with those reported for the first half of the year.

The company expects results for the full year tol be impacted by the additional operational costs of new stores in Sweden and Australia and ongoing important investments, including technology, supporting future growth of the group.