LUXURY handbag maker Mulberry sank to a half-year loss after investing in new products, but tourists taking advantage of the weak pound to snap up bargains helped send sales surging.
The group said UK like-for-like retail sales rose seven per cent in the six months to September 30, boosted by a luxury spending spree sparked by sterling's sharp fall since the Brexit vote.
Half-year results showed Mulberry slipped into the red with losses of £500,000, against pre-tax profits of £100,000 a year earlier after it splashed out £1 million on new designs.
The group has launched the first collection under recently-hired creative director Johnny Coca, with nine new bags - including a revamp of its best-selling Bayswater design.
Mulberry chief executive Thierry Andretta said the new range has been "well received by our existing customers and a new audience".
But he added: "The UK and global outlook has become more uncertain since we last reported; however, we are in a good position to continue to build our business."
Total group-wide like-for-like retail sales lifted seven per cent in the first half, with international sales up 10 per cent.
Mulberry said that, while tourist spend remained strong since the first half, UK customer demand had "softened" in recent weeks, with total like-for-like retail sales growth easing back to three per cent in the 10 weeks to December 3.
The group has staged a bounce-back over the past 18 months after seeing profits hammered as it attempted to move upmarket and compete with the likes of Gucci and Dior.
Sales have recovered strongly after it moved to cut prices.
The group, which has 67 stores globally, also announced alongside half-year results a deal to grow in Asia with its majority shareholder - Challice, a company run by Singapore billionaire Christina Ong and her family.
They will form a new venture to run Mulberry's business in China, Hong Kong and Taiwan.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules here