Ailing Mulberry issues third profit warning in 10 weeks

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The Independent Online
MULBERRY, the troubled luxury goods group, delivered more bad news for investors yesterday when it issued its third profits warning in 10 weeks. Shares lost 35 per cent of their value to close at 37p, their lowest level since the company was floated on the Alternative Investment Market in May 1996. The shares were then priced at 153p.

Analysts questioned yesterday whether Mulberry, valued at pounds 8m, had a future as an independent company. "Its best protection is that the founder owns 60 per cent of the shares," one analyst said.

Mulberry said its profits for the year to 31 March would now fall "significantly short of expectations", due to the continued strength of sterling. It now expects to produce a pre-tax loss of pounds 750,000 "at best" after exceptional costs of pounds 600,000.

It is cutting 28 jobs across the group at a cost of pounds 200,000, in addition to pounds 400,000 redundancy costs previously announced. All small leather goods production will be shifted from Britain to Spain and Italy.

The company has pledged to maintain the dividend. Roger Saul, chairman and founder, and finance director Godfrey Davis have waived their right to their pounds 71,000 divided payment.

"It is bitterly disappointing to announce this news," Mr Saul said. "We ... are being punished by the strength of sterling. Compared to last year, for every pounds 10m of export sales, we have lost pounds 2.5m."