Highlights:

• Total revenue of £76.5m, up 6%
• Retail revenue of £46.5m, up 13% and up 7% like-for-like
• Wholesale shipments to third parties of £30.0m, down 4%

Retail

Total retail sales increased by 13% compared to the same period last year:

• UK retail sales were up 10% with UK full price sales performing in line with our expectations. UK off-price sales have remained weaker, however this primarily reflects a strategic decision not to make product specifically for the off-price business.
• International retail sales, which are currently a small part of the business, were up 41%, but have not met our expectations for the first half of the year. However, we remain confident in our international expansion strategy and have recently opened stores in San Francisco, Washington D.C., Berlin and Frankfurt Airport.

Wholesale

Wholesale shipments were down 4% compared to the same period last year, reflecting three factors:

• We have made a strategic decision to rationalise certain international wholesale accounts in order to improve the quality of Mulberry's distribution network. This will result in a reduction in wholesale sales in the current year, but is consistent with our long term strategy of growing brand value;
• A more challenging external environment in Asia, resulting in cautious ordering by franchise partners; and
• Tough half year comparatives which were boosted by the restocking of the wholesale channel last year.

Primarily due to lower wholesale revenue, Mulberry now expects Group revenue growth for the year to 31 March 2013 to be below market expectations. As a result of this, combined with the previously highlighted investment being made in international retail expansion, we now expect full year profits to be below last year.  However the business continues to be strongly profitable and generate significant cash to fund our future expansion.

Bruno Guillon, Chief Executive Officer, commented: "Mulberry's core UK retail business and key wholesale accounts continue to perform well in the context of a more challenging external environment. Although international retail sales are behind expectations, newly opened stores are performing satisfactorily and we are on track to open our target of 15-20 stores during 2012/13. The steps we have taken to improve the quality of Mulberry's distribution network in both the retail and wholesale channels will result in the short term slowing of sales growth. However, we firmly believe these steps are in the long term interests of building Mulberry into a global luxury brand.

The Mulberry brand continues to gain recognition globally and we remain very confident in the outlook for the business. We continue to focus on creativity, craftsmanship and quality and in this context will start the construction of our second UK factory within the next few weeks."

Mulberry is a British design company renowned world-wide for its craftsmanship and quality. The brand’s backbone is an extensive line of luxury fashion bags for men and women that combine stylish, stand-out design with the finest leathers and detailing. In addition to leather goods, Mulberry's product range includes womenswear, accessories and footwear.

Mulberry Group plc