Mulberry reacts to profit slump with marketing investment

Fashion brand Mulberry will ramp up its marketing spend after its profits for the six months to 30 September fell by 44%. The plans are part of its push into Asia and the US.

The luxury leather-goods retailer attributed the losses to its expansion plan over the last 12 months. It has opened eight new Mulberry shops and nine department stores across the world.

The company says the fall in profits was “anticipated” and is a result of entering overseas markets and developing brand awareness. It adds that it is “very confident that the marketing investment in the US will pay off”.

It is likely Mulberry’s total marketing budget, thought to be £4.9 million in 2007, will also be increased next year to build the brand’s presence overseas.

It also reported that like-for-like sales rose by 11% for the same period and chief executive Godfrey Davis says he expects further sales growth following the success of the £600 Bayswater bag, where demand has outstripped supply.