Luxury handbag maker Mulberry said its full-year pretax profit would be significantly below expectations after a slump in first-half trading added to the disruption of a product overhaul.
Mulberry had warned in June of a tough year ahead as it shifts to a lower price strategy following an ill-fated attempt to move upmarket that hit sales and led to chief executive Bruno Guillon's exit in March.
In the latest in a string of profit warnings, the firm said today that tougher than expected trading conditions had added to its woes, with falling levels of tourist shoppers hurting its core UK business.
Revenues for the six months to September 30 fell 17% to £64.7m, the firm said, with retail sales down 9% and wholesale sales down 31%.
Analysts have slashed their full-year pretax profit forecast by 60% to £4m. That compared with £14m a year ago, itself a near halving from the year before.
Mulberry, like rivals Louis Vuitton and Gucci, is struggling to compete against more accessible, trendy fashion brands. To better compete, the firm is strengthening its product offering at a price range of £500-800.
Mulberry said sales trends had improved over the first half, indicating it was taking the right steps to restore the businessto growth.
The firm said its flagship Paris store, due to be opened early next year, would mark the end of its investment in new stores, which has seen it expand its footprint globally.
