Luxury fashion brand Mulberry has confirmed it is to open a second factory in Somerset, creating 300 jobs, as global demand for its upmarket handbags and other accessories spirals.
The firm, which employs 250 people at its factory in Chilcompton, near Midsomer Norton, said the new plant – to be built in Bridgwater – would double its UK capacity. Mulberry is investing around £7.5m in the new factory, which is expected to open next year, along with £2.5m received from the Government’s Regional Growth Fund (RGF). The RGF money will support recruitment and training of the new staff.
The firm, whose bags are used by a host of A-list celebrities, first announced its plans for the new factory at the time of the RGF fund allocation last November.
Over the past year it has also extended capacity at its Chilcompton factory by 30%, creating an additional 60 jobs.
Mulberry said these moves were “anchored by the quality of our products and our heritage of English craftsmanship”.
The brand has become much sought after among the fashion conscious and is a major exporter, particularly in the high-growth Middle East and Chinese markets.
It is one of the few remaining leather firms in Somerset – a county that once boasted a large industry in shoes, bags, gloves, coats and belts made from sheepskin and leather.
Confirmation of the new factory came as the firm announced a 54% increase in pre-tax profits to £36m on total revenues 38% higher at £168.5m in the year to March 31.
During the year it opened 14 new stores in the UK, Netherlands, US, Korea, Singapore, Thailand and Taiwan.
Chairman Godfrey Davis, who is moving to a non-executive chairman role, said: "This year has seen us deliver another strong set of results and we have performed well against expectations.
“While the current economic conditions make the short term trading outlook more challenging in some markets, we remain confident about Mulberry's long term future.
“We continue to focus on developing our business internationally, opening new stores and building the foundations for long term growth.
“The investment in a second factory in the UK will reinforce the group’s position as the largest UK manufacturer of luxury leather goods.”
International revenues rose by 61% to £65.2m during the period, accounting for 39% of group revenues, while online sales grew 58% to £14.5m, accounting for 9% of group revenues.
The company said demand for its products has continued since the year-end with retail sales during the 10 weeks to June 1 coming in at 12% higher than the same period last year (a 3% like-for-like increase).
UK full-price retail sales grew by 14% like-for-like although the outlet business decreased by 24% like-for-like largely due to tough comparative figures during the same period last year, when they rose by 56%.
Mulberry said the Autumn/Winter 2012 season had started well with the third-party wholesale order book 11% higher than the Autumn/Winter 2011 season at the same time last year.
In May it launched the new Del Rey bag, inspired by the American singer Lana Del Rey – a product the firm said “illustrates the elegance and timeless luxury of Mulberry”.
It opened a store in Zurich last month and will be opening shop-in-shops in the KaDeWe and Oberpollinger department stores in Berlin and Munich and a store in Frankfurt Airport. It has also signed leases for stores in Cologne and Berlin which will open around the end of the financial year.
