Mulberry bags profits high

Leather goods retailer Mulberry said its focus on handbags and accessories had “delivered” as it revealed its best profits in a decade today.

The Bath-based firm decided to concentrate on its two core divisions after results for the first half of 2004 slumped £107,000 (€158,000) into the red.

This year profits for the same period reached £2.2m (€32.5m) and sales rose by 59% to £19.1m (€28.2m).

A spokesman said the company had been “stretched” since moving into clothing and fabric ranges in the late 1990s and that the “back to basics” approach had paid off with the best profits since the business listed on AIM in 1995.

Chief executive Godfrey Davis said: “We have delivered strong sales and profit growth by focusing on handbags and leather accessories.”

Accessories such as its leather organisers and notepads made up 90% of group sales and its handbags were snapped up by Hollywood stars such as Kate Winslet, Scarlett Johannsen and Orlando Bloom.

Its operating profits rose from £133,000 (€197,000) to £2.8m (€4.1m) as it expanded in the UK and Asia.

Four new shops and concessions opened last year at Heathrow Airport’s Terminal One, Hong Kong, Bangkok and Kuala Lumpur and there are plans to open outlets in Taiwan and Edinburgh next year.

The group said business in the United States, Asia and Japan was progressing well but added that although demand in the UK and Europe continued to grow, there would be a slow down in the second half as last year’s growth was “substantial”.

The 32-year-old company operates from 13 outlets in the UK including concessions at Harrods and Harvey Nichols. It also sells its products in France, Germany, Finland, Norway, Denmark and Sweden.

It launched in the United States last autumn and 12 months on, its handbags are available in 63 stores across the country, including the popular Saks and Barneys department stores.

This winter one of the most fashionable bags is Mulberry’s big buckled leather Roxanne handbag. It comes in a range of colours and retails for around £600 (€888).