The turnaround of luxury goods group Mulberry has been dealt a blow after UK sales were hit by a shortage of tourist shoppers over the summer.
The company has been looking to revive its fortunes through lower-priced products and the launch of new ranges such as the Tessie bag in June and bags developed in conjunction with model Cara Delevingne.
However, it issued a fresh warning on profits today as it admitted that revenues were down by 17 per cent to £64.7m in the six months to September 30, driven by a 12 per cent slump in UK store sales.
It said trading was adversely affected by lower footfall, particularly among tourist shoppers, although business has been better in overseas markets.
The warning is the latest setback for the Somerset-based firm after a disastrous previous financial year in which profits were cut by nearly half to £14m. Shares lost a quarter of their value today as Mulberry said profits for the year to March 31 will be significantly below City expectations.
The company is now run by Godfrey Davis, who oversaw the rapid growth of the Mulberry brand between 2002 and 2012 and has returned to the helm on an interim basis while a permanent boss is found.
Under the leadership of previous boss Bruno Guillon, the firm sought to compete with the likes of Prada by improving the quality of its products and increasing appeal in international markets.
However, the resulting increase in prices alienated the company’s core customer base and triggered a series of profit warnings.
Mr Davis said Mulberry was taking the right steps to restore growth but that trading conditions have been more difficult than expected, in part due to continuing headwinds affecting the luxury goods sector.
He added: “My first actions on returning as acting chief executive focused upon reinforcing our product ranges. I explained that the impact would be progressive and should produce benefits over the medium term.
“The new products are beginning to reach our shops with the launch of the Cara Delevingne bags at the beginning of September and with further new products being offered in our shops during November.”