Mulberry's Profit Warning Over Asia Demand
Iconic British fashion brand Mulberry has shocked investors by warning that its profits will be lower than last year.
Following in the footsteps of rival Burberry, the company described a slowdown in demand from Asia, which it described as a "more challenging" environment.
It said its revenue would be less than expected because of a 4% slump in wholesale shipments and lower international sales.
"Primarily due to lower wholesale revenue, Mulberry now expects group revenue growth for the year to 31 March 2013 to be below market expectations," a company statement said.
"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 warning caused shares to fall almost 30% to 945p in early trading.
It follows several upgraded profit forecasts over the last year, and in June the company announced a 54% hike in full-year profits to £36m.
Mulberry's new chief executive Bruno Guillon, who joined the company from luxury brand Hermes in March, insisted the firm is still profitable.
"The Mulberry brand continues to gain recognition globally and we remain very confident in the outlook for the business," he said in a statement.
It reported a 7% rise in like-for-like retail revenue for the six months to the end of September, and UK sales increased by 13% compared with same period last year.
The company is known for its high-end leather handbag, such as the popular Alexa bag, named after the television presenter and model Alexa Chung.
It is due to begin building a second UK factory in Somerset in the next few weeks, which will double its UK capacity.