Burberry Moves Into Profit

British brand Mulberry has reported a first half profit for the first time since its AIM flotation in 1996, seeing the benefits of a focus on international growth. In the six months to September 30, Mulberry reported a profit of £17,000, compared to a loss of £615,000 a year earlier. The group, which operates a relatively small number of stores in the UK and abroad, upmarket concessions in department stores including Harrods, Liberty and Harvey Nichols, as well as wholesaling the brand, said total sales were flat at £12.1m.

An increased focus on accessories, which now account for over 80 per cent of group sales, was balanced by rationalisation of the men's and women's wear business and the impact of a number of shop closures. The first half saw the launch of Mulberry in the USA, as well as distribution agreements in Japan and the rest of Asia. Mulberry said that with strong and experienced partners in these key international markets, the next task is to build "significant and resilient long term business" in each territory.

Like-for-like sales in UK full price shops grew by 7 per cent over the first half, with a new shop opened in September in Notting Hill in London, and a deal to open in Heathrow Terminal 1 in the spring. Autumn/winter 2004 wholesale orders grew by 9 per cent, with the recently-launched Bayswater and Roxanne bag ranges driving what Godfrey Davis, chairman and chief executive, called the "transformation of Mulberry into a must-have fashionable brand attracting new younger customers".

Mulberry said like-for-like sales in full price shops for the nine weeks to November 27 are up 13 per cent. Davis said: "Current indications are that sales will grow in the second half of the year, subject to reasonable results in the key Christmas trading period." Full year results "are likely to exceed current market expectations".