Profit warning puts thorn in Mulberry
MULBERRY shares were looking the worse for wear yesterday after the troubled luxury leather goods group issued yet another profit warning.
The English luxury brand has been attempting to turn itself around following an ill-fated attempt to move the brand upmarket under previous chief executive Bruno Guillon.
But in a statement yesterday, Mulberry warned that trading conditions had been worse than expected, due to tough conditions in the luxury sector and falling tourist shoppers to its UK stores.
Sales slumped 17 per cent to £64.7m in the six months to 30 September, with wholesale falling 31 per cent and retail sales down 12 per cent.
As a result, Mulberry now expects full-year pre-tax profits to be “significantly below current expectations”.
Shares in the company tumbled 10 per cent last night.
Barclays slashed its pre-tax profit forecast for the year to 31 March by 60 per cent to £4m. That compares with £14m a year ago, when profits were almost half the previous year’s.
Mulberry is hoping its new ranges of more affordable handbags will help to win back shoppers, with the launch of the Tessie collection in June and a new range designed by Cara Delevingne in September.
“The new products are beginning to reach our shops… with further new product being offered in our shops during November,” Mulberry’s interim boss Godfrey Davis said.
“The first half has been difficult, but the group remains profitable and cash generative, giving us the resources to invest for the future,” he said.