Mulberry Group, a British luxury-handbag maker, fell the most since in 14 years in London trading after the company said profit will unexpectedly fall because of declining shipments to wholesale customers.

The shares slid as much as 28 per cent to 950.5 pence, the steepest intraday drop since March 3, 1998. That wiped £221 million (€271 million) off the company's market value.

The unscheduled announcement that profit is likely to drop compares with analyst estimates for pre-tax profit to rise to £41.8 million in the fiscal year through March from £36 million in the previous 12 months.

Wholesale shipments in the six months ended September 30 fell 4 per cent to £30 million, as a result of which the company said it expects full-year revenue growth to miss estimates.

Among the reasons for the decline were a strategic decision to trim international wholesale accounts and a tougher climate in Asia that led to "cautious ordering," Mulberry said today.

The shares were down 23 per cent at 1,020 pence as of 8.16am, cutting the company's market value to £609 million.

Luxury-goods makers have reported divergent sales patterns since the end of August as an imminent government-leadership change in China and Europe's sovereign-debt crisis take their toll on demand.

Burberry Group said last month that pre-tax profit for the year ending March would be at the lower end of a range of estimates, citing slowing same-store sales.

Worldwide luxury sales will grow 5 per cent in 2012, less than half last year's pace, led by a slowdown in Europe, and expand at a similar speed through 2015, according to Bain and Co.

Mulberry said revenue rose 6 per cent to £76.5 million in the six months through September, slowing from a gain of 25 per cent in the second half of the previous financial year.

Retail revenue of £46.5 million rose 13 per cent in total and 7 per cent on a like-for-like basis, the company said.

Bloomberg