Mulberry's share price plunged more than 27 per cent this morning after the premium handbag brand revealed its third profit warning this year.
The British group, which is currently endeavouring to regain ground lost under former chief executive Bruno Guillon's disastrous attempt to shift it into the luxury market, said it expected profit for the year to March 2015 to be “significantly below current expectations”.
Shares in Mulberry fell to 562.5p from an opening level of 781p, and at pixel time were down 18.5 per cent at 611.5p.
Despite warning investors previously that it faced a medium-term hit to profits as it rebuilds its position in the premium market, Mulberry – which also lost its creative director in 2013 - said trading conditions had been “more difficult than expected”.
First half revenues to September 30 have fallen 17 per cent to £74.7m, despite what Mulberry described as improving sales trends, buoyed by the new Cara Delevinge-fronted range.
Wholesale revenues saw the most dramatic declines, falling 31 per cent to £19.6m. Mulberry said this was greater than expected, reflecting “a combination of inventory reduction and conservative ordering by our Asian and European franchise partners”.
Mulberry said it expected this pattern to continue for the rest of the year, before improving by the 2015/16 financial year.
Full price sales in the UK dropped 12 per cent to £20.9m, while outlet sales have plummeted 23 per cent to £10.1m after the company “continued to normalise from unusually high levels during the prior year”.
Both online and international sales rose, although from a smaller base, by one per cent to £6.6m and by 20 per cent to £7.5m respectively. Overall, the retail arm fell by nine per cent to £45.1m.
Executive chairman Godfrey Davis, who has been running the business since Guillon's departure earlier this year, said: "As I explained in June, my first actions on returning as acting chief executive focused upon reinforcing our product ranges. I explained that the impact would be progressive and should produce benefits over the medium term.
“The new products are beginning to reach our shops with the launch of the Cara Delevingne bags at the beginning of September and with further new product being offered in our shops during November.
"As expected, the first half has been difficult, but the group remains profitable and cash generative, giving us the resources to invest for the future. Despite the current challenges, I remain confident that we will build on Mulberry's solid foundations and unique brand positioning in the luxury market to restore growth in the medium term."
Mulberry's share price - what's the story?
Mulberry's share price first fell off a cliff in January, when it revealed its first profit warning of the year, and has recovered hardly any ground since then.
The bag brand saw its share price plummet from 906.4p on January 28 to 704p on January 29, and then again to 660p the following day.
It jumped back up to nearly 720p when Guillon announced his departure. Since then it has bobbed around the 720p-760p range, but nudged towards 800p at the start of this month.
However, today's bad news has seen it plummet even further, dropping to nearly 560p at one point – its lowest level for around four years.