SerpApi.Org
The boss of Mulberry has called on Andy Burnham to scrap the widely despised tourist tax to boost British manufacturing across the regions and revive luxury sales.
Chief executive Andrea Baldo has said that restoring a VAT-free shopping scheme should be ‘high on the agenda’ for the new Prime Minister, as it will help boost jobs across the country, including at its own hub in Somerset.
It came as the British handbag maker's losses narrowed from £32.2million to £8.9million after a turnaround strategy that has refocused on its home market.
Shares rose 5.8 per cent to 145p on Wednesday morning.
Baldo said that scrapping the tax, which hundreds of businesses, including Primark, Harrods and Burberry have called on previous Governments to axe, would ‘unlock an opportunity…which helps all the cities of the UK.’
Baldo pointed to Liverpool and Manchester as particular destinations that could reap the rewards, as well as London.
Burnham has pledged to generate 'good growth in every postcode' with policies that shift economic and political power away from Westminster.
Rishi Sunak and Jeremy Hunt scrapped VAT-free shopping, which allowed overseas visitors to claim back 20 per cent on purchases.
While countries in Europe charge VAT, they also offer a refund to overseas visitors taking purchases home.
Luxury firms have argued that the loss of the tourist tax break in Britain is a major own-goal, with the levy hitting the UK economy while boosting sales in Paris, Milan and beyond.
But previous Governments have been hesitant to scrap the tax on tourists, despite businesses arguing that there are benefits for the entire economy and country.
There was a ‘great advantage’ in being able to offer tourists from abroad products that have been manufactured in Britain, Baldo said. Mulberry’s bags are made in Somerset.
But he added: ‘Tourism is a big part of our business that we have completely neglected because of the situation in London'.
‘I am sure that if we can unlock that, then we're just going to produce more because people love the UK manufacturing story, and that's obviously so important. So it's connected. It's not just trading retail, but it's really truly connected with Somerset and the factories.’
Sales rose 4 per cent to £125.5million for the 52 weeks to 28 March, from £120.4 million a year earlier.
In the UK, sales have been boosted by existing customers returning to buy new bags, including summery raffia bags and new versions of flagship products such as its Bayswater handbag.
And the relaunch of its Roxanne bag, first popular in the 2000s and now fronted by Wicked actress Cynthia Erivo, has also helped to reel back fans of the brand as well as appeal to Gen Z shoppers.
Baldo added: 'More than half of our retail and digital sales came from returning customers, demonstrating that we are winning back former clients who already know and love the Mulberry brand and the importance of regaining relevance in our home market in order to grow internationally.'
His turnaround has focused on reviving the firm’s ‘cool Britannia’ image from the 2010s, when 'It girls' like Alexa Chung - who has a bag named after her - paraded its products.
It has focused on boosting its UK presence with more concessions in John Lewis and Selfridges stores.
Baldo said the brand had found a ‘sweet spot’ with products in a £800-£1,200 price range.
