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Mulberry: Chief calls to scrap London tourist tax as losses widen

Is London suffering from the so-called 'tourism tax'? Mulberry's boss has called for an end to VAT for international visitors (Photo by Clemens Bilan/Getty Images for Mulberry)
Is London suffering from the so-called 'tourism tax'? Mulberry's boss has called for an end to VAT for international visitors (Photo by Clemens Bilan/Getty Images for Mulberry)

The chief of Mulberry has called to scrap the so-called ‘tourist tax’ for visitors to London to help business growth in the UK, as the British fashion designers’ losses widen.

In a half year update, the luxury brand best known for its handbags,reported a loss before tax of £12.8m up from £3.8m last year, blaming operational costs for new store openings in Sweden and Australia.

In its home market of the UK, retail sales were up slightly by six per cent to £36.2m and digital sales also rose 19 per cent.

Its Asia Pacific retail sales increased by 13 per cent to £13.5m. However, underlying retail sales decreased by seven per cent due to the challenging China macro-economic climate and reduced footfall across the region.

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Its chief, Thierry Andretta, said that a weak economic outlook is impacting the entire luxury industry and called for UK government to bring back VAT free shopping for international tourists – which was scrapped in 2021.

He said: “There is no doubt, however, that the macro-economic environment has deteriorated, and this has had a knock-on effect on consumer sentiment. At Mulberry we have ensured that we are prepared to navigate this tricky environment, and we are confident in our ability to continue to execute our strategy.

“I continue to believe that offering VAT-free shopping in the UK would be one of the most effective ways to encourage business growth in this country.”

He added: “The fact that this has not been reinstated is creating challenges for all sectors; impacting not only the luxury players, but also hospitality, travel and tourism.”

“As we look ahead to the New Year, I urge policy makers to collaborate with all industries campaigning on this issue and reconsider implementing this to support businesses across the UK.”