UK retailer Mulberry has issued a profit warning after a "greater than anticipated" decline in wholesale sales.
Revenues for the first half of the year were down 17% at £64.7m, compared to £78.1m in the first half of 2013. The firm expects the slump in wholesale sales to continue for the remainder of the year, before improving during 2015-16.
In a trading statement issued today, it said: "Profit before tax for the full year to March 2015 is expected to be significantly below current expectations."
Wholesale sales plummeted during its first half by 31%, to £19.6m. Mulberry blamed the decline on a combination of inventory reduction and conservative ordering by its Asian and European franchise partners.
The retail business fell by 9% to £45.1m. UK full price sales fell more sharply, by 12%, to £20.9m. A decline in the number of shoppers, particularly tourists, has caused the fall, Mulberry suggested.
Mulberry executive chairman Godfrey Davis said he has been reinforcing the product ranges to combat the decline: "As expected, the first half has been difficult, but the group remains profitable and cash generative, giving us the resources to invest for the future.
"Despite the current challenges, I remain confident that we will build on Mulberry's solid foundations and unique brand positioning in the luxury market to restore growth in the medium term."