Luxury bag brand Mulberry reported a “challenging” market as retail sales in the UK declined by 1% for the 52 weeks to 31 March.
International sales increased 20% to £25.7m from £21.5m for the same period in 2016/17. The international like-for-like rise was 5%.
Profit before tax was reported as £6.9m, against a figure of £7.5m in 2016/17. Wholesale sales dropped by 5% to £37.7m, largely as a result of China and Hong Kong transitioning to own retail.
Online sales improved by 14% to £29m, accounting for 17% of the group revenue, up 2% on the previous year.
Mulberry had 69 directly operated stores in the period, up from 67, as it focused on international store expansion across Asia during the year.
The luxury retailer has signed an agreement with SHK Holdings Limited and is set to launch in South Korea after strong international sales performance. Following a joint investment of £4.6m, Mulberry Korea is expected to commence trading by autumn 2018. The bag brand will have a 60% share, and the remaining 40% will be owned by SHK.
Chief executive Thierry Andretta said: “We have made significant progress during the year on our international strategy, creating new Mulberry subsidiaries in China, Hong Kong, Taiwan and Japan. We are also pleased to announce today the formation of a new majority-owned venture to develop the business in South Korea. Our international business is growing and, following the completion of this set-up phase in Asia, we will focus on omnichannel, digital partnerships and marketing investment in the region.
“Following anther period of cash generation, our balance sheet is strong. Although the UK market remains challenging, we will continue to invest in our strategy to develop Mulberry into a global luxury brand to deliver increased shareholder value.”
Retail like-for-like sales were down 7% in the 10-week period to 2 June. International sales rose by 1% but UK sales were down 9% as a result of “lower footfall and fewer tourists”.