Mulberry’s chief executive has urged the new Prime Minister to restore VAT‑free shopping for overseas visitors, arguing that the change would boost jobs across the United Kingdom, including at the brand’s manufacturing hub in Somerset.
The request comes after Mulberry narrowed its losses from £32.2 million to £8.9 million and recorded a 4% rise in sales to £125.5 million for the year ending March.
Shares in the company rose 5.8% following the announcement.
Mulberry said eliminating the tourist tax would unlock opportunities for cities such as Liverpool, Manchester and London, where tourism supports a range of suppliers and service providers.
The tax, which had been removed by previous governments, has been a point of contention for retailers including Primark, Harrods and Burberry.
Britain is the only major economy that does not refund VAT to overseas shoppers, a policy that has affected luxury brands and shifted some investment toward other markets.
The Treasury has maintained that abolishing VAT‑free shopping would not significantly impact the economy, a view that retailers challenge.
Mulberry highlighted that its bags are produced in Somerset, emphasising the advantage of offering tourists products made in the United Kingdom.
The CEO noted that tourism drives demand for UK‑made goods, a narrative that could be leveraged to increase production and support local factories.
The company’s recent recovery has relied on returning customers purchasing both new and classic lines, such as a relaunched Roxanne bag.
Distribution has expanded through concessions in major department stores, helping the brand reach a wider audience.
Mulberry positions itself in the £800 to £1,200 price segment, appealing to both long‑time customers and younger shoppers.
The message for other suppliers is that a credible British‑made story remains valuable to consumers who are willing to pay for it.
The debate over the tourist tax reflects broader concerns about supply chains and regional economic growth beyond the capital.
The company’s plea aligns with the Prime Minister’s pledge to promote growth across all regions of the country.
If reinstated, VAT‑free shopping could stimulate manufacturing activity and support jobs throughout the United Kingdom.
The outcome will test the new government’s commitment to regional economic development and its ability to balance fiscal policy with industry needs.
