Bag maker Mulberry quadruples profits

The group, founded in 1971, has benefited from seemingly insatiable demand for its goods - including its Alexa handbag, named after television presenter Alexa Chung.

The company has doubled the production of women’s handbags as a result of the rapid increase in demand and is expanding capacity at its Somerset factory by 30%, creating some 50 new manufacturing jobs.

Mulberry, which has 86 stores and concessions worldwide, including 44 in the UK, posted pre-tax profits of £23.3 million in the year to March 31, compared to £5.1 million the previous year.

As the group eyes further expansion in China and Japan, one analyst said he believed it could more than double profits by 2014.

Shares, which peaked at around 1628p last month compared with 200p a year ago, were 5% higher at 1404p today.

John Cummins, analyst at Altium Securities, said it could still be “just the beginning of the Mulberry story”.

He said: “Mulberry remains under-represented in most of the largest luxury goods markets globally, with only two stores in the US, one in China and limited exposure in Japan.”

The group has consistently shrugged off the consumer spending squeeze as demand for its products continues to grow unabated.

The company said sales were up 69% in the year to £121.6 million, and reported continued like-for-like growth in the 10 weeks to June 4 of 42%.

Mulberry opened nine new stores in the year, including in China, Malaysia and Qatar, as well as a new flagship store in New Bond Street, London.

New store openings are planned for New York, Amsterdam, Germany, Korea, China and Bangkok over the next 10 months.

International revenues more than doubled in the period to £40.5 million, while online sales were up 64% to £9.2 million.

Mulberry was founded by Roger Saul and his mother Joan in 1971 and the pair opened a factory in Chilcompton, Somerset, two years later. It continues to make handbags at its original factory, which is called The Rookery.

The company floated on the London Stock Exchange in 1996 and by 2003 Mr Saul had sold his last stake in the firm.

Mulberry launched its Alexa handbag in January 2010, which has since become one of their most popular items. The standard bag costs £785, but the Oak Ostrich version retails at £3,750.