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Fewer London tourists prompt Mulberry profit warning

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(Globalpost/GlobalPost)

LONDON (Reuters) - British luxury brand Mulberry <MUL.L> issued a second profit warning in six months on Friday, partly blaming reduced tourist spending in London stores for weaker than expected post-Christmas sales.

The firm on Friday forecast a year to March 31 pretax profit of 26 million pounds on revenue of 165 million pounds, compared with analyst forecasts of pretax profit of 31.2 million pounds and revenue of 177.4 million pounds, according to Reuters data.

In the 2011-12 year the firm made a pretax profit of 36 million pounds.

Mulberry said retail sales over the Christmas period were generally in line with expectations but deteriorated during the last 10 weeks, including a reduction in tourist spending in London stores.

The news could also have a negative read across for other luxury groups, such as Burberry <BRBY.L>, which also rely on tourists from faster growing markets such as China and Russia to travel to London to shop in areas like Mayfair.

It said retail like-for-like growth for the year was expected to be about 6 percent but wholesale sales were expected to be down 15 percent.

That reflected a previously flagged move to limit the amount of stock going into lower quality wholesale accounts, as well as lower than expected in-season ordering.

It said the order book for autumn/winter 2013 was, however, building satisfactorily.

Mulberry had already warned on year profit in October after sales of its leather goods and accessories were hit by a slowdown in Asia.

Shares in Mulberry, down 37 percent over the last year, closed Thursday at 1,235 pence, valuing the business at 739 million pounds.

(Reporting by James Davey; editing by Kate Holton)

http://www.globalpost.com/dispatch/news/thomson-reuters/130322/mulberry-warns-year-profit