Luxury handbag maker Mulberry today warned profits would substantially miss expectations after a tumble in UK sales over Christmas.
The Somerset-based firm revealed retail sales went into reverse in the crucial festive trading period, down 7% in the eight weeks to January 25 as it lost out in hefty discounting in the UK.
Its trading troubles were compounded by disappointing wholesale orders in South Korea - its largest Asian market - with the group admitting trading in the country had been “significantly” more challenging than expected.
Shares plunged 22% after the alert, which follows a tough couple of years for the group, which has suffered falling profits and was left reeling by the departure of its renowned creative director Emma Hill last autumn.
Mulberry is still searching for a replacement for Ms Hill, who was credited with turning the firm from a trusted briefcase and wallet maker into an international fashion powerhouse with a clutch of celebrity fans.
Chief executive Bruno Guillon said: “Due to tough trading conditions over the Christmas period which saw significant discounting across the market, Mulberry has experienced lower than expected UK retail sales which, together with wholesale order cancellations from Korea, will adversely impact our profit this year.”
Sales rose by 3% in the nine weeks to November 30, but fell sharply in the following eight weeks to leave the figure 3% lower overall in the first 17 weeks of its second half.