Luxury brand and retailer Mulberry has reported a 36% fall in pre-tax profits to £10m for the first half of its financial year.
Mulberry said group sales rose 6% to £76.5m but that the sales growth in its retail division was offset by a decline in wholesale sales in the six months ended September 30, 2012.
Retail sales were up 13% to £46.5m and up 7% on a like-for-like basis while wholesale sales fell by 4% to £30m.
The brand said the dip in wholesale revenues was due to “account rationalization and a more challenging environment”.
Mulberry’s retail business in the UK performed well with sales up 9% to £39.2m in the first half with sales of full-price product up 14% compared with the same period last year.
International retail sales were also up 40% to £7.3m as the brand opened new standalone stores in San Francisco, New Jersey, Zurich and a shop-in-shop in Berlin during the six-month period.
On current trading Mulberry was more positive and said retail sales rose 19% in the nine weeks to December 1.
“The UK retail business and key wholesale accounts have continued to perform well in the context of a challenging economic environment,” said Mulberry chief executive Bruno Guillon.
“The international retail rollout is on track with 17 to 20 new store openings expected for the full year. Profit before tax for the period was below last year, mainly reflecting quality initiatives and increased investment in international retail expansion to drive future growth.”