Mulberry profits jump as expansion continues

Luxury goods company Mulberry, famous for its leather bags, has reported a sharp jump in annual profits.

The company, which is based in Somerset in the west of England, reported profits of £36m for the year to March.

It is continuing to expand, and plans to open a second factory in the county, doubling production and creating 300 jobs.

Despite the rise in profits, Mulberry's shares fell 25% after recent sales figures fell below investor hopes.

Sales for the 10 weeks to 9 June grew by 3%, which was lower than expected. Mulberry's shares - which have risen by about a third since the start of the year - fell by 458p to 1,555p.

Overseas expansion

Mulberry is planning to expand internationally by opening another 16 stores. Its overseas business generates nearly 40% of sales.

It also says its wholesale orders for the coming autumn-winter season are 11% higher than they were this time last year.

The company's chairman, Godfrey Davis, said that current economic conditions remained challenging, but that he was confident about the company's future.

UK sales at Mulberry's 45 stores and department store concessions rose by 30% in the year to March.