British accessory business Mulberry is closing its Bond Street flagship store after 27 years. The boutique, housed in one of London’s most affluent shopping destinations, failed to generate sufficient sales after the government ended its VAT-free shopping scheme.
What some outlets have dubbed the ‘tourist tax’, Mulberry’s store revenue was highly dependent on tourists, where duty-free shopping made the price attractive to overseas buyers. These shoppers can no longer claim the 20 percent VAT back.
Countries such as Italy and France, both key luxury shopping destinations, do offer tax free shopping, making them more attractive markets for visitors looking to purchase high-end goods.
“The lack of VAT-free shopping in the UK has been particularly felt on Bond Street, which has always been an iconic shopping destination for tourists. The decline in visitors has impacted footfall and sales,” a spokesperson for the brand told Daily Mail. “High rents and business rates have also conspired to make ‘the store commercially unviable resulting in us taking the difficult decision to close”.
The closure comes less than two years after Mulberry shuttered its Paris flagship on rue Saint Honoré, which saw a decline in visitor numbers as a result of the pandemic.
The British government has received mixed support for ending its tax free shopping scheme, with some economists suggesting it costs the pubic purse, instead of benefiting it. Leading retailers including Harrods and UK luxury body Walpole have campaigned to have the VAT free scheme reinstalled.
In London Mulberry still operates boutiques in Battersea, Covent Garden, Spitalfields, Westfield and Gees Court, in addition to shop in shops in department stores Peter Jones, John Lewis and Selfridges.