LUXURY fashion house Burberry showed it is not immune to the wider economic turbulence as it warned yesterday its profits would be at the lower end of expectations.

The group, famous for its red, black and camel-coloured check, said like-for-like sales had ground to a halt in the ten weeks to September 8 and have started to fall over recent weeks. Total sales including new space were up 6 per cent.

The brand, which has 196 retail stores, 207 concessions, 48 outlet shops and 58 franchise stores worldwide, warned adjusted pre-tax profits for the year to March 31 will be around the lower end of market expectations.

Founded in 1856, the designer brand spent much of the year bucking the depressing wider retail trend thanks mainly to its popularity in robust emerging markets, especially China.

Burberry chief executive Angela Ahrendts warned the external environment was becoming more challenging.

She said: "Given this background, we are tightly managing discretionary costs and taking appropriate actions to protect short term profitability."

The flat like-for-like sales in the second quarter so far are a sharp slowdown from the 6 per cent hike reported for the first quarter to June 30.

Burberry reported a 24 per cent surge in annual profits to £366m in its last financial year, while total revenues were also up 24 per cent to £1.9bn as key Asian markets showed more strong growth and flagship stores in London and Paris performed well.

Burberry previously announced plans to add a further 12 per cent to 14 per cent of selling space in this financial year but did not give details of store openings in today's update.

The group has been focusing on larger format stores, such as its relocated site in London's Regent Street.

It is due to issue another trading update on October 11 before its interim results for the six months to September 30 on November 7.

Burberry shares slumped 17 per cent in the wake of the warning, wiping £1bn from its market value and leaving the stock at its lowest point this year.

The previous range of market forecasts for the financial year had been for Burberry to achieve profits of between £407m and £455m.

Investec Securities analyst Bathany Hocking said: "We have been fans of Burberry, and remain of the view that the strategy, luxury positioning and management team should lead to long-term sector outperformance.

"Today's statement does, however, imply a significant slowdown and Burberry is not immune from wider macro-economic turbulence."

Burberry shares slumped 17 per cent in the wake of the warning, wiping £1bn from its market value and leaving the stock at its lowest point this year.

The previous range of market forecasts for the financial year had been for Burberry to achieve profits of between £407m and £455m.

Investec Securities analyst Bathany Hocking said yesterday: "We have been fans of Burberry, and remain of the view that the strategy, luxury positioning and management team should lead to long-term sector outperformance.

"Today's statement does, however, imply a significant slowdown and Burberry is not immune from wider macro-economic turbulence."