British success story Mulberry has shocked investors with a profits warning amid more signs that the bubble in the luxury goods market has burst.
Its shares peaked at 2500p in the summer but are now just a third of that level after the company followed Burberry in warning of slowing demand from emerging markets in Asia.
Mulberry, which recently announced plans to open a second factory in Somerset to keep up with demand, said profits for the year to March will be below expectations and the previous year.
It blamed lower-than-expected international sales and a 4% decline in Mulberry's wholesale shipments, taking the shine off a 13% hike in retail sales to £46.5 million, including a 10% rise in UK sales.
The warning, which caused its shares to fall by more than a quarter, is a blow to chief executive Bruno Guillon, who only joined the company from luxury brand Hermes in March.
The company's best known product of recent times has been the Alexa bag - inspired by style icon Alexa Chung - while its Del Rey bag was inspired by American artist Lana Del Rey.
It upgraded profit forecasts on several occasions over the last year and in June announced a 54% jump in full-year profits to £36 million.
But Burberry recently rattled the City with signs of a slowdown in demand in China, although it offered a more reassuring update earlier this month. The blue-chip company's shares were 4% lower on Tuesday.
Mr Guillon said the short-term slowing of sales growth reflected a drive to improve the quality of its wholesale distribution network. But he said the moves were in the long-term interests of building Mulberry into a global luxury brand.
Philip Dorgan, retail analyst at Panmure Gordon stockbrokers, said the profit warning was "severe", but added that it was likely the international slowdown was "just a blip".