Mulberry Group said yesterday (8 December) that concentrating on its core products of handbags and leather accessories had helped it achieve a 59% increase in sales in the first half of the year.

However, the group added that demand in Europe and the UK would slow, following a period of rapid development.

The company said first half sales increased by 59% to £19.1m over the same period in 2004. Sales growth in the previous six months to 31 March 2005 was 36%. The growth resulted in operating profit for the first half of GBP2.3m, compared to GPB133,000 in the first half of 2004.

Godfrey Davis chairman and CEO said: "We have delivered strong sales and profit growth by focusing on handbags and leather accessories. Demand continues to grow in the UK and Europe. The expansion of our business in the USA, Asia and Japan is proving successful."

Gross profit margin increased to 54% (six months to 30 September 2004: 52.6%) as a result of the increased volume despite the lower margins on sales to its distribution partners in the USA, Asia and Japan.

In a statement, the company said that accessories, which account for over 90% of group sales, saw substantial growth in the period.
Looking forward, Mulberry said: "Demand in the UK and Europe continues to grow strongly, although at a slower rate, following a period of rapid development. The development of our business in the USA, Asia and Japan is progressing well with consumer demand driving sales. 
"The accessories third party order book for the spring 2006 season is approximately 85% ahead of the order book at the same point in the prior year. It is estimated that more than 80% of the orders for the spring 2006 season have been taken at this date. Third party wholesale sales account for approximately half of the group's turnover."
It went on: "Mulberry's own stores in the UK continue to trade strongly. The rate of growth will decline in the second half because the figures will be compared to the period last year when substantial sales growth was achieved. UK full price like for like retail sales for the nine weeks to 3 December 2005 were 11% higher than the prior year comparative period."