British fashion label & retailer Mulberry has issued a profit warning today as post-Christmas trading has proved “disappointing” due to a reduction in tourist spend across its London stores.
While retail sales over the critical festive period were “generally” in line with expectations, the last 10 weeks has seen a decline in sales and footfall and retail like-for-likes for the year are now expected to sit at around six per cent.
Luxury retail is continuing to struggle as the economy falters further and the brand was forced to issue a profit warning in October last year as a challenging market in Asia caused a decline in wholesale shipments, falling four per cent to £30 million in the six months to September 30th 2012.
As a result, full-year wholesale sales are expected to decrease by approximately 15 per cent compared with last year, though Mulberry noted that its order book for next season is “building satisfactorily”.
Mulberry now expects full-year revenues to sit at around £165 million and a pre-tax profit of £26 million for the year to March, down 18 per cent on initial forecasts of £30.7 million, according to The Guardian.
Shares in the brand plummeted 19 per cent today following the news, though Mulberry CEO Bruno Guillon implied that such hiccups are the inevitable result of strong growth.
“After three years of rapid growth, Mulberry has experienced a year of consolidation whilst we build the foundations for future growth,” Guillon explained.
“We are focused upon optimising the distribution network and adapting our tactical marketing strategy to drive international brand awareness.
“We continue to reinforce Mulberry‘s luxury positioning through an enhanced focus on creativity, craftsmanship and quality.”