Burberry upbeat over recovery in China as Covid-19 disruptions fade
Upbeat signs as shops reopen and luxury shoppers start returning to Hong Kong and Macau, says CFO
18 January 2023 - 16:36
by Paul Sandle
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A man walks past a store of luxury brand Burberry at a shopping mall in Beijing, China. Picture: REUTERS/TINGSHU WANG
Britain’s Burberry is seeing promising signs of recovery in China as the disruption from Covid-19 lockdowns and infections that caused a sharp slowdown in its growth before Christmas has started to recede.
The luxury brand’s like-for-like sales grew 1% in the three months to end-December, after a 23% fall in mainland China, its biggest market before the pandemic, largely offset higher spending by US tourists and locals in Europe.
The growth was half the 2% level expected by analysts, and represented a slowdown from 11% Burberry had reported for the previous quarter.
CFO Julie Brown said Burberry, known for its trench-coats and black, red and camel check, had been affected by lockdowns in China for nine months followed by a surge in infections in December.
But she said there were positive signs of recovery as stores reopened in mainland China and the country’s luxury shoppers started returning to Hong Kong and Macau.
“In January, we’ve seen a change in traffic, we’ve seen some strong trade coming through,” she told reporters on Wednesday.
“The timing and pace of recovery is likely to be somewhat unpredictable, but we’re very positive about the early signs and confident in the long-term opportunity [in China].”
Chinese consumers accounted for about 25% of Burberry’s revenue, down from 40% prepandemic, she said, with most spending happening in mainland China rather than in tourist centres outside the country.
Richemont, the Swiss luxury group that sells Cartier jewellery and watches, also said on Wednesday that it expected a strong rebound in China.
Burberry, which will show its new designer Daniel Lee’s first collection next month, continued to perform well in Europe.
Brown said strong trading over the festive period in cities such as Paris and Milan resulted in 19% like-for-like growth in the region in the 13 weeks to end-December.
Comparable sales in the Americas fell 1% in the quarter, but she said that was an improvement quarter on quarter and Burberry had seen stronger demand in December.
The com-any’s share price, which rose 28% in the past 12 months, reversed early losses to trade 2.7% up.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Burberry upbeat over recovery in China as Covid-19 disruptions fade
Upbeat signs as shops reopen and luxury shoppers start returning to Hong Kong and Macau, says CFO
Britain’s Burberry is seeing promising signs of recovery in China as the disruption from Covid-19 lockdowns and infections that caused a sharp slowdown in its growth before Christmas has started to recede.
The luxury brand’s like-for-like sales grew 1% in the three months to end-December, after a 23% fall in mainland China, its biggest market before the pandemic, largely offset higher spending by US tourists and locals in Europe.
The growth was half the 2% level expected by analysts, and represented a slowdown from 11% Burberry had reported for the previous quarter.
CFO Julie Brown said Burberry, known for its trench-coats and black, red and camel check, had been affected by lockdowns in China for nine months followed by a surge in infections in December.
But she said there were positive signs of recovery as stores reopened in mainland China and the country’s luxury shoppers started returning to Hong Kong and Macau.
“In January, we’ve seen a change in traffic, we’ve seen some strong trade coming through,” she told reporters on Wednesday.
“The timing and pace of recovery is likely to be somewhat unpredictable, but we’re very positive about the early signs and confident in the long-term opportunity [in China].”
Chinese consumers accounted for about 25% of Burberry’s revenue, down from 40% prepandemic, she said, with most spending happening in mainland China rather than in tourist centres outside the country.
Richemont, the Swiss luxury group that sells Cartier jewellery and watches, also said on Wednesday that it expected a strong rebound in China.
Burberry, which will show its new designer Daniel Lee’s first collection next month, continued to perform well in Europe.
Brown said strong trading over the festive period in cities such as Paris and Milan resulted in 19% like-for-like growth in the region in the 13 weeks to end-December.
Comparable sales in the Americas fell 1% in the quarter, but she said that was an improvement quarter on quarter and Burberry had seen stronger demand in December.
The com-any’s share price, which rose 28% in the past 12 months, reversed early losses to trade 2.7% up.
Reuters
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