Fashion
British luxury brand Burberry says Chinese luxury spending patterns have impacted on its sales in the six months to September 30.
While the brand’s global retail sales rose two per cent to £1.105 billion in the half year, CEO Christopher Bailey described the market as “increasingly challenging” for luxury customers, especially in China.
“The external environment became more challenging during the half, affecting luxury consumer demand in some of our key markets. In response, we have intensified our focus on driving sales and productivity, while taking swift action on discretionary costs.
“While mindful of this external volatility, our plans for the festive season position us well to return to a more positive sales trend in the all-important second half. Looking further ahead, we maintain our focus on – and confidence in – the long-term growth opportunities for our business across channels, regions and product categories.”
Retail revenue was £774 million, up one per cent on a same stores basis.
But it was a different story in Asia.
“Asia Pacific delivered a mid single-digit percentage comparable sales decline in the half, impacted by a further year-on-year deceleration in Hong Kong in the second quarter compared to the first, as footfall continued to drop,” the company said in a statement. “Mainland China comparable sales decreased slightly in the half, in the context of weakening consumer sentiment in the market in the second quarter. Excluding Hong Kong and Macau, comparable sales were broadly unchanged year-on-year in the first half.”
Japan, however, was a standout.
“Japan saw comparable sales growth well in excess of 50 per cent, albeit off a small base (with total sales now accounting for around two per cent of global retail/wholesale revenue).
“Good progress was made during the half in expanding our retail presence, with the addition of our sixth free-standing store, in Shinjuku, Tokyo and the opening of a further six department store concessions, bringing the total to 19. We also assumed operation of 10 childrenswear concessions.”
The company also expanded its beauty distribution, through Sephora globally and with Shiseido in Japan.
