Not all luxury brands are created equal. While you’d expect posh handbags seller Mulberry’s wealthy clientele to be insulated from cost-of-living pressures, its first half results have more in common with your humble high street retailer than a high-end brand.
AJ Bell’s Russ Mould said: “Even though the company has raised prices, sales have fallen, and Mulberry is in the unenviable position of chalking up a material loss. That loss could have been even worse if the company hadn’t hedged its energy costs for three years in October last year, so management deserve a pat on the back for that move.
“One bright spot for Mulberry came from China where sales were appreciably higher – though the recent turmoil in the country could undermine this positive trend.
“A key plank of the strategy is to build on Mulberry’s Asian presence and the company also plans to bring distribution in-house, making its online and physical proposition more closely aligned and moving away from afranchise model to full ownership of stores.
“However, there are risks to this approach and after today’s half year numbers CEO Thierry Andretta will be under big pressure to deliver.”