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Luxury fashion retailer Mulberry has shuttered its Bond Street store after it claimed that the end of VAT-free shopping for international consumers has negatively impacted its sales at the location.
Last year chancellor Jerermy Hunt decided to implement the levy which now sees international visitors unable to claim back the 20% VAT on purchases.
Mulberry claimed the Bond Street store, which originally opened in 1995, was no longer viable due to a lack of footfall and sales combined with high rents and business rates.
A Mulberry spokesman told This is Money: “The lack of VAT-free shopping in the UK has been particularly felt on Bond Street, which has always been an iconic shopping destination for tourists. The decline in visitors has impacted footfall and sales.”
Last year, the British brand reported a pre-tax loss of £3.8m in the first half of this year, down from a profit of £10.2m the year before, as UK sales saw a 10% decrease to £34.1m compared to £38m last year.
The group’s results are thought to have been impacted by UK retail sales in the broader economic environment, with Mulberry’s revenue during the first half also down 1% to £64.9m compared to last year’s £65.7m.
However, the company reported that its international sales remained in line with the same period last year at £17.5m, while a gross margin of 71%, a 2% rise on last year, was achieved due to “continued strategic focus” on full-price sales and increased volume efficiencies.
