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Burberry’s sales have been hit by the outbreak of Covid in China

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a high-end fashion label Burberry hit by a Covid resurgence in its biggest market and key growth country China, which saw same-store sales rise just 1% across the group in the three months to early July.

A fashion brand worn by celebrities including the James Bond singer Billie Eilish, StormyRihanna and Harry Potter star Emma Watsonwas forced to close 24 of its 64 stores in the territory in February when the virus swept through the population again.

However, taking the Chinese market out of the equation, Burberry reported a 16% increase in total sales for the period, with Europe, the Middle East and Africa (EMEIA) doing impressive business. In-store sales in the EMEIA region were up 47% year-on-year, according to the brand’s trading information.

Burberry said it would continue to target “high single-digit revenue growth” and 20% profitability over the medium term.

“While the current macroeconomic environment creates short-term uncertainty, our performance in Mainland China has been encouraging since our stores reopened in June and we are actively managing headwinds from inflation“, the group said.

Based on foreign exchange rates as of July 11, Burberry said it now expects a “currency tail” of £190m on revenue and £90m of adjusted operating profit for the full year 2023.

The company said it achieved “double-digit comparable growth” in leather goods and outerwear outside mainland China. and that he saw a good performance of his signature swim trunks and jackets across the group.

Just this morning it was announced that China’s economic growth was hit in the second quarter due to the damage caused by the widespread Covid lockdowns.

In the period from April to June, the volume of production decreased by 2.6% compared to the previous quarter. Year-on-year, the economy grew by 0.4% in the second quarter. However, this was the worst increase since the first months of the pandemic in 2020.

Jonathan Aykeroyd, chief executive of Burberry, said: “Our performance in the quarter continued to be affected by the lockdown in mainland China, but I was pleased to see our more localized approach contributing to the recovery in the EMEIA region, where local customer spending was higher than previously. – pandemic level”.

Burberry’s sales have been hit by the outbreak of Covid in China

Source link Burberry’s sales have been hit by the outbreak of Covid in China

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