Mulberry urges government to cancel ‘tourist tax’ as sales continue to fall

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Mulberry has blamed a slowdown in demand for luxury spending and a lack of VAT free shopping for a nine per cent decline in sales over the golden quarter.

The designer, best known for its handbags, said UK retail sales took and four per cent hit, and total retail sales were knocked 1.5 per cent.

International sales managed to grow by 3.9 per cent, however group revenue in the period was down 8.4 per cent.

Alongside, taking a cost hit from the opening of new stores in Sweden and Australia, the luxury retailer blamed upmarket shoppers scaling back for the slide in sales.

Thierry Andretta, chief executive officer, also blamed the UK’s government’s hesitancy to reinstate VAT shopping for international tourists for damaging sales of its expensive garments.

He said: “In the UK, we continue to believe the lack of VAT-free shopping is impacting the retail landscape, as well as the hospitality, leisure and tourism sectors.

“Looking ahead, we are continuing to execute our plans and remain confident that our investments will underpin future sustainable growth.”

He added: “In the run up to Christmas, the macro-economic environment continued to impact consumer spending in the luxury retail sector, which Mulberry was not immune from.

The results mirror that of fellow designer Burberry who also blamed economic pressures for flattening sales.

Burberry shares plummeted by over 10 per cent in response to the news.