Mulberry Reveals Luxury Sales Slump As High-end Shoppers Tighten Purse Strings

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Luxury handbag manufacturer Mulberry has reported a dip in annual sales as high-end shoppers cut back on spending.

The British company disclosed a 4% decrease in group revenues for the year ending March 30, attributing the slump to worsening trading conditions in the final quarter. The decline in sales occurred ⁘against a backdrop of challenging macro-economic conditions and a decline in luxury consumer spending⁘.

In the UK, retail sales fell by 3.2%, while trade in China was also affected by economic uncertainty and a reduced number of luxury shoppers visiting stores in the region. Somerset-based Mulberry cautioned that there is no immediate resolution to the trading difficulties in the UK and China.

In the UK, trading difficulties have been exacerbated after the Government abolished VAT-free shopping for tourists a few years ago, a decision that particularly impacted luxury retailers who depend on wealthy tourists. Several luxury retailers, including Mulberry and Burberry, have previously attributed the abolition of tax-free spending to weaker sales in the UK, with consumers opting to spend more on luxury goods in other European cities.