Two retailers issue profits warnings

The weakness of Christmas trading on British high streets was underlined yesterday when two retailers issued profits warnings. Oasis Stores, the women's fashion chain, issued its second warning of the year saying that "in line with many other companies in the retail sector" it was finding current trading difficult and was unlikely to meet profit forecasts.

Oasis shares crashed by 30 per cent to 130p. This is well below the issue price of 148p when the company came to the market in 1995. Its first warning came in June just two months after some Oasis directors had sold shares at an average price of 400p. In current trading Oasis's like-for-like sales are 6 per cent below those of last year.

Mulberry, the luxury goods group which floated on the Alternative Investment Market last year, saw its shares fall sharply when it said its profits for the year to March will fall "significantly below market expectations". It blamed difficult markers for luxury goods in Europe, the economic conditions in the Far East and the strength of sterling, which has affected tourist spending in London.

Mulberry shares, which have performed dreadfully since their market debut last year, collapsed 20p to 53.5p. They were priced at 153p on flotation.

Oasis's broker Societe Generale Strauss Turnbull has cut is full year profit forecast from pounds 15.6m to a range of pounds 10m-pounds 12m. Nick Bubb, the company's broker said: "Its been a below par year, but that happens in fashion. They will bounce back."

Oasis was affected earlier in the year by buying mistakes. In September it said its autumn ranges had failed to take off because they lacked the racy Spice Girl items that were selling well elsewhere. But this time the company blamed external factors.

Mr Bubb said consumer confidence was fragile and issues such as higher interest rates and the Government's stance on benefit payments were encouraging people to be cautious and save more.