Mulberry plunges after profit warning

Shares of upmarket handbags and leather accessories firm Mulberry went into freefall after it said revenue growth for the year to March 30th 2013 is expected to fall below market expectations.

The retailer blamed weaker than expected international retail sales and as wholesale revenue fell behind expectations.

"As a result of this, combined with the previously highlighted investment being made in international retail expansion, we now expect full year profits to be below last year," the group said.

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Wholesale shipments fell 4% compared to the same period last year, partly because of more cautious ordering by franchise partners amid a challenging external environment in Asia.

Retail sales increased 13% from the year before. UK retail sales were up 10% while international retail sales, which account for a small part of the business, rose 41%, lower than expectations for the first half of the year.

Mulberry said: "We remain confident in our international expansion strategy and have recently opened stores in San Francisco, Washington DC, Berlin and Frankfurt Airport."

"The business continues to be strongly profitable and generate significant cash to fund our future expansion."

Total revenue rose 6% to £76.5m in the six months to September 30th while retail revenue gained 13% to £46.5m. Like-for-like increased 7%.

Wholesale shipments to third parties dropped 4% to £30m.

CJ