Mulberry gives profit warning as tourist spend declines in London

British high-end designer Mulberryhas warned that its financial performance this year will come in below forecasts due to weak trading since Christmas, partly as tourists spent less at its flagship stores in London.

British high-end designer Mulberryhas warned that its financial performance this year will come in below forecasts due to weak trading since Christmas, partly as tourists spent less at its flagship stores in London.

"Due to weaker-than-anticipated trading post-Christmas, revenues and profit before tax for the year ending March 31st 2013 are expected to be below market expectations," Mulberry said on Friday morning.

Revenues are expected to slip to £165m, from £168m the year before, while profit before tax will drop from £36m to £26m.

The company, known for its luxury handbags, said that while retail sales over the Christmas period were in line with expectations, trading across the retail portfolio during the last 10 weeks has been "disappointing". Retail like-for-like sales are expected to grow by 6.0% in the full year, down from the 7.0% growth in the first half.

Meanwhile in Wholesale, sales are predicted to fall by 15% on last year due to its "channel rationalisation" and lower-than-expected in-season ordering. Nevertheless, Mulberry said that the order book for the Autumn/Winter 2013 season is "building satisfactorily".

The channel rationalisation was a "strategic decision" to rationalise certain international wholesale accounts to improve the quality of its distribution network. This reduction in sales had been flagged at the half-year stage.

"After three years of rapid growth, Mulberry has experienced a year of consolidation whilst we build the foundations for future growth," said Chief Executive Officer Bruno Guillon.

"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."

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