Luxury brand Mulberry has issued a plea to the government for funding to help build a second factory in the UK.

According to the Times Mulberry wants to open a second factory near its existing site in Somerset to meet rising international demand for its products.  The company is reportedly seeking £2.5m from the government to add to £5m of investment for the new site as the company cannot fund the entire cost itself due to its obligation to shareholders.

However chief executive Godfrey Davis said it was “very unlikely” Mulberrry would be able to open a second factory without financial backing from the coalition’s Regional Growth Fund.

Davis said: “There is something inherently satisfactory about a British brand making a good part of its products in the UK. We want to grow our manufacturing base here.

A decision on the allocation of the money is expected this week.

In February Retail Week reported that punishing UK tax rates were effectively blocking the brand from opening a new factory in the country.

Chief executive Godfrey Davis said Mulberry was considering opening a second factory in the UK next year due to a spike in demand for its bags, but had been put off from doing so by the impact rising National Insurance (NI) rates have on operating costs. Employer NI contributions are set to rise to 13.8% from 12.8% for those earning more than £136 a week in April.

Speaking to Retail Week at the time Davis called on the government to introduce “NI holidays” for manufacturers looking to set up in this country, and said this sort of ongoing tax break would act as an incentive to British fashion brands.

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