British accessory maker Mulberry has warned that profits for the year will be substantially below forecasts due to a sharp decline in sales over Christmas and wholesale orders that have been in Korea.
In a trading update covering the 17 weeks ended January 25th, Mulberry said that retail growth in its international markets had continued during December and January although the trading environment in the UK deteriorated over the period.
In the wholesale channel the company said that the Korean market was ³significantly more challenging than anticipated² and that it had become clear ³in recent days² that wholesale order cancellations from Korean customers were likely to be significant, resulting in a 10% drop in overall wholesale sales compared to last year.
Bruno Guillon, CEO, commented: ³Due 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. Despite this, the company continues to be cash generative and to invest in the on-going process of transforming Mulberry from a domestic to a global luxury brand, the progress of which is demonstrated by the continued growth in international retail sales.²
