Mulberry gives new profit warning
Luxury handbag retailer Mulberry has issued its second profit warning in six months following a slowdown in tourist spending in its London stores.
The company said weaker than expected trading post-Christmas meant that revenues and pre-tax profit for the year to 31 March 2013 were likely to be below market expectations.
Mulberry now anticipates its pre-tax profits for the full year to be in the region of £26 million with revenues of around £165 million. This compares to analysts’ expectations for pre-tax profit of £31.2 million.
Although retail sales over the Christmas period were generally in line with expectations, trading across Mulberry’s retail portfolio during the last ten weeks has been disappointing, including a reduction in tourist spending in the London stores. Retail like-for-like growth for the year is expected to be in the region of 6%.
Never Miss a Retail Update!Mulberry also expects its wholesale sales to be down by approximately 15% compared to last year, due to channel rationalisation and lower than expected in-season ordering. However, the retailer said its order book for Autumn/Winter2013 is building satisfactorily.
Bruno Guillon, chief executive officer, commented: “After three years of rapid growth, Mulberry has experienced a year of consolidation whilst we build the foundations for future growth. 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.”
Mulberry previously warned on profit last October following a shortfall in wholesale revenue and weaker than expected international sales.
