Mulberry shares plunge on profits warning

British luxury handbag maker Mulberry warned on Tuesday that annual profits would be lower than last year, due to falling wholesale revenues and international retail sales, sending shares tumbling. "Primarily due to lower wholesale revenue, Mulberry now expects group revenue growth for the year to 31 March 2013 to be below market expectations," it said in a gloomy trading update. "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. "However the business continues to be strongly profitable and generate significant cash to fund our future expansion." In morning deals, Mulberry shares slumped as low as 945 pence on the London stock market. It later stood at 950 pence, down 28.03 percent from Monday's closing level. Mulberry added on Tuesday that revenues advanced six percent in the first half of its financial year, despite tough trading conditions. Revenues gained six percent to £76.5 million ($122.4 million, 93.9 million euros) in the six months to the end of September, compared with the same part of the previous fiscal year. "Mulberry's core UK retail business and key wholesale accounts continue to perform well in the context of a more challenging external environment," added chief executive Bruno Guillon in the statement. "Although international retail sales are behind expectations, newly opened stores are performing satisfactorily."