High-end handbag maker Mulberry has revealed a hit to full-year sales as luxury shoppers cut back on their spending.
The British firm reported a 4% drop in group revenues for the year to March 30 as it said trading conditions worsened in the final three months.
It said the sales fall came “against a backdrop of challenging macro-economic conditions and a decline in luxury consumer spending”.
In the UK, retail sales dropped 3.2%, while it said trading in China was also impacted by economic uncertainty in the country and fewer numbers of luxury shoppers visiting stores in the region.
Somerset-based Mulberry warned that there was no immediate end in sight to the UK and China trading woes.
It also reiterated its warnings over annual losses as it counts the cost of expansion across Sweden and Australia, as well as investment in areas such as IT.
Shares in the group slumped 9% in Wednesday morning trading after the gloomy update.
Thierry Andretta, chief executive of Mulberry, said: “Mulberry has not been immune to the broader downturn in luxury spending experienced in recent months, particularly in the UK and Asia.
“Looking ahead, the trading environment in the UK and China remains challenging and we do not expect this to change in the short term.”
The wider sector has suffered amid a global luxury spending downturn, which has impacted the likes of British fashion label Burberry and Gucci owner Kering.
French group Kering warned last month over an expected plunge in half-year profits after first quarter revenues slumped by 10%, with sales at its flagship Gucci brand off by 18%.
In the UK, trading troubles have been compounded after the Government scrapped VAT-free shopping for tourists a few years ago, a move which particularly affected luxury retailers who rely on affluent tourists.
Many luxury retailers, Mulberry and Burberry, have previously blamed the reversal of tax-free spending on weaker sales in the UK, with shoppers instead choosing to spend more on luxury items in other European cities.