Chinese lockdowns hammer sales at Burberry
LOCKDOWNS in China have led to a slump in demand for Burberry trench coats and leather bags despite a jump in annual sales.
President Xi Jinping’s zero-covid policy has forced several major cities, including the luxury hub of Shanghai, to standstill in recent weeks and has hit spending.
Burberry has been particularly vulnerable as China is the brand’s largest market and key to its five-year revival plan. The luxury fashion house said that around 40pc of its network, including dozens of shops and home delivery services, was currently disrupted. It warned that growth depended on further lockdowns and how quickly shoppers start spending once shops reopen.
The luxury fashion house posted a 23pc rise in revenues to £2.8bn for the year to April 2, while operating profits rose by more than a third to £523m. Like-for-like sales growth in stores slowed down in the second half of the year to 7pc compared with 37pc in the six months prior. Sales were dragged down by a 13pc slump in China in the last quarter.
The FTSE 100 company is part way through a five-year revival plan meant to push it further upmarket. New chief executive Jonathan Akeroyd, who took the helm last month after leaving Versace, said he would reveal his plans for Burberry in November.