Stronger pound ends Chinese shopping spree at Burberry

BURBERRY looks to be falling out of fashion with shoppers as the lure of the weaker pound wears off for wealthy overseas customers.

The British fashion house stood firm on plans to focus more on luxury goods, as it revealed group revenue fell by 2pc in the final three months of 2017.

Burberry blamed lower store sales in the UK on fewer Chinese customers. Like-for-like sales across its stores in Europe, Asia and the US nudged up 2pc.

It said customers were spending less on expensive items like coats, which sell for up to £6,000 online, and opting for cheaper goods like T-shirts for £95 and small leather products.

The news spooked investors, sending shares tumbling by more than 9pc, or 166pc, to close the day at 1619p. Analysts were expecting to see a rise in sales following Marco Gobbetti’s appointment as chief executive last year.

On joining, Gobbetti said the fashion house would undergo a five-year plan to see it place more emphasis on luxury goods and introduce higher pricing for new items like leather bags.

The move is also likely to see some department stores shut and the refurbishment of other shops.

Gobetti insisted that Burberry was making good progress: ‘We are building on strong foundations and are fully focused on the successful delivery of our multi-year plan to position Burberry firmly in luxury and deliver long-term sustainable value,’ he said.