Mulberry has announced plans to open a factory at Bridgwater in Somerset that will provide jobs for around 256 people and is being partly funded by the government.

The luxury brand said today (2 November) that the new factory will produce some 140,000 handbags per year. The facility will be in additon to the site it already operates in the area.

The factory will be partially financed by a GBP2.5m grant from the government's Regional Growth Fund. Mulberry will invest a further GBP5m in building the factory.

Construction is set to commence in 2012 and it be operational by the end of 2013.

"We are delighted that our bid for funding has been successful. As a British luxury brand we want to grow our manufacturing base in this country and ensure that our continuing success supports the broader economy," said chairman and chief executive Godfrey Davis.