Mulberry profits to beat forecasts

Mulberry profits to beat forecasts

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Handbag maker Mulberry has said annual profits would beat expectations

Luxury handbag maker Mulberry has said annual profits would beat expectations after a “very strong” Christmas.

The group reported a 66% leap in own stores and concession sales, with like-for-like growth of 70% across full price outlets in the six weeks to January 15.

Discount outlet like-for-like sales lifted 34%, according to the group.

Mulberry handbags can sell for as much as £3,000 and include its recently launched Alexa handbag – named after television presenter Alexa Chung. Other brands include Bayswater, Daria and Mitzy.

The Bath-based group is having to expand its factory by nearly a third to help it meet soaring demand, particularly from international consumers.

It said last month that interim profits trebled to £4.7 million, adding it was unable to match demand in the UK and overseas, with sales to Asia up 180% in the half-year.

Shares in Mulberry rose 5% on Friday’s full-year profits cheer.

Philip Dorgan, analyst at Mulberry’s in-house broker Altium Securities, upped his full-year underlying profit forecast from £15 million to £18.5 million for the year to March 31, which would be a three-fold rise on the year before.

Mulberry said profit margins were being helped by a greater proportion of full price sales against a year earlier. It added that wholesale orders for spring 2011 are currently 104% up year-on-year, with three months of the season remaining.

Mulberry has 82 stores and concessions, of which 35 are overseas partner stores. In the UK, it has 21 own-stores and 26 concessions.

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