Luxury fashion brand Mulberry has announced a slump in profits despite strong sales.
The handbag and leather goods group said it suffered a 36% fall in first half pre-tax profits to £10m though revenues rose 6% to £76.5m.
The company blamed changes to its wholesale business for the drop in earnings as costs increased.
Mulberry had warned in October that profits would be hit because of slowing demand in Asia and its decision to slash its wholesale network.
Nevertheless, the firm behind Bayswater handbags costing £1,400 said like-for-like retail sales were up 11% in the nine weeks to December 1 and it expected to meet current full-year market forecasts which it reduced, partly as a result of its moves to limit stock heading to its lower quality wholesale accounts.
While its push to boost the value of Mulberry's brands at the top end appears to be paying off, the decision has coincided with a slowdown in wholesale demand.
It is a similar tale for rival Burberry which has seen strong sales among wealthier shoppers.
However it too has endured a slowdown in China where the boom in demand for luxury goods has tailed off.
The effects of the global economic slowdown have had little impact on many top brands away from fashion as those with cash have continued to spend.
While trading in Europe has been generally muted, sales of expensive cars have endured while the cheapest brands - many of them Asian-made - have largely replaced the traditional ones in the popularity stakes.
Jaguar Land Rover has seen sales soar in Russia and China while Ford's European sales have declined, sparking job losses which have also hit the UK.