* Mulberry profit warning is second in 6 months
* Sees FY profit of 26 mln stg vs f'cst 31.2 mln stg
* Bang & Olufsen also cuts revenue outlook
* Mulberry shares fall 17 pct; B&O, Burberry down too (Adds analysts comments, background)
By James Davey
LONDON, March 22 British handbag maker Mulberry warned profits would be hit this year, partly blaming a fall in spending by tourists who have been crucial to the luxury industry's ability to grow in a flagging European economy.
Danish luxury stereo and television maker Bang & Olufsen also cut its revenue outlook on Friday, adding to jitters in the sector.
Luxury brands like Hermes and Gucci, have largely coped with an ailing European economy thanks to strong demand from Chinese buyers, both in their home market and when travelling abroad.
Smaller brands like Mulberry are finding it more difficult to entice tourists from rival stores, especially when they become picky. They have been introducing bolder designs to tempt more fashion-savvy customers and have even been raising prices to attract those looking for something more exclusive.
"In times of a soft economy, consumption focuses on edgy brands and quality rather than on accessible luxury," said Mario Ortelli, senior analyst at Bernstein Research.
Mulberry shares closed down 17 percent and Bang & Olufsen's off 15 percent.
Shares in Britain's largest luxury brand Burberry, which like Mulberry relies heavily on tourists in its London stores, closed 4 percent lower, one of the biggest declines by a European blue-chip company.
"I see more risks for a brand like Burberry - which is still in transition from accessible to aspirational luxury and has already higher prices than Mulberry - rather than for exclusive brands like Chanel or Hermes," Ortelli said.
Mulberry said pretax profit for the year ending March 31 was likely to drop 28 percent to 26 million pounds, on revenue of 165 million pounds.
That compared with analyst forecasts for pretax profit of 31.2 million pounds and revenue of 177.4 million, according to Reuters data.
Mulberry, which sells Bayswater handbags for around 1,400 pounds ($2,100) and mint green cotton tweed coats for 1,750 pounds, also issued a profit warning in October, blaming a slowdown in Asian demand.
It said retail sales over the Christmas period were broadly in line with expectations but deteriorated over the last 10 weeks, including a drop in tourist spending at London stores.
Luca Solca, head of Luxury Goods at Exane BNP Paribas, said Mulberry's warning was also the result of its current transition towards a retail-focused business.
The company said retail like-for-like growth for the year was likely to be about 6 percent, while wholesale sales were expected to be down 15 percent.
The wholesale drop reflected a planned move to limit the amount of stock going into lower quality wholesale accounts with the aim of growing the Mulberry brand's value in the long-term, as well as lower than expected in-season ordering.
"Mulberry is a very small brand, more exposed to volatility," Solca said. "Repositioning takes time," he said.
The firm said the order book for autumn/winter 2013 was building satisfactorily.
Other luxury brands have reported a slowdown in London trade as a result of fewer tourists.
According to Britain's Office for National Statistics, visits to the country by overseas residents fell by 1 percent in January, following two strong months in November and December.
"It's (shopper numbers) about 30 percent less than last year, some days 60 percent," said Paulina Rajnert, an administrative manager at Miu Miu's New Bond Street store, noting most of the reduction was due to fewer tourists.
Mulberry has recently been subject to takeover speculation. Earlier this month French luxury group Hermes denied a press report that is was mulling a bid.
Analysts at Barclays cut their profit forecast for 2012-13 to the company guidance and their forecast for 2013-14 to 30 million pounds from 39.8 million.
Separately on Friday, French group PPR unveiled plans to rename itself "Kering" as part of its transformation from a retail conglomerate to a luxury and sporting goods group.
($1 = 0.6588 British pounds) (Additional reporting by Clare Hutchison and Antonella Ciancio; Editing by Mark Potter and Elaine Hardcastle)