Mulberry shares dive on new profit warning

Mulberry is most famous for its handbags

Shares in luxury handbag maker Mulberry are down 14% after it told investors full-year profits will be "significantly" below expectations.

In the six months to 30 September, revenues were down 17% from a year earlier to £64.7m.

Mulberry said it had been expecting a "challenging year", but actual trading conditions had been tougher than forecast.

Earlier this year, Mulberry announced a radical restructuring.

Under its previous chief executive, Bruno Guillon, the company had begun trying to compete with the higher end brands, such as Prada and Fendi, a move described by analysts as "misguided".

Former boss Godfrey Davis returned to the helm in June this year and has moved the company's products back down the affordability scale, launching a new range of "Tessie" bags, developed with top model Cara Delevingne, starting at £500.

Mr Davis was previously chief executive from 2002 until his appointment as non-executive chairman during June 2012.

Mulberry's statement said the reaction to the new range had been "positive".

Mr Davis said the company remained "profitable and cash generative".

"Despite the current challenges, I am confident that we will build on Mulberry's solid foundations and unique growth," he said.