Mulberry warns on profits

Luxury brand Mulberry this morning issued a profit warning, largely due to a fall in wholesale shipments over the half year to 30 September.

Mulberry, which makes luxury leather handbags, said this morning that wholesale shipments to third parties were down four per cent over the period to £30m.

As a result, it expects revenue growth and full-year profits for the year to 31 March to be below market expectations.

A rationalisation in the firm’s distribution network overseas and a slowdown of demand from Asia are behind the warning on profits, the AIM-listed fashion retailer said.

In a trading statement, Mulberry added that total revenue over the half year rose six per cent to £76.5m. Retail revenue came in at £46.5m, up seven per cent on a like for like basis.

Chief executive Bruno Guillon said: “The steps we have taken to improve the quality of Mulberry's distribution network in both the retail and wholesale channels will result in the short term slowing of sales growth.

“However, we firmly believe these steps are in the long-term interests of building Mulberry into a global luxury brand.”