Chinese Covid restrictions weigh on Burberry sales
Around a third of the global luxury industry was based on Chinese spending before the pandemic.
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.Continued Covid-19 restrictions in China have held retailer Burberry back from truly rebounding from the pandemic, the company’s latest figures show.
The fashion brand said first-quarter sales dipped 35% in the country – a vital market for its clothes.
Before the pandemic, around a third of the global luxury industry relied on the spending of Chinese buyers, both at home and as tourists abroad.
So the continued restrictions in the country took a big chunk out of Burberry’s performance.
While the current macroeconomic environment creates some near-term uncertainty, we are confident we can build on our platform for growth
Excluding China, sales were up 16% globally, but when it is included they only rose by 1%.
But there appears to be a brighter future – since stores reopened in China in June the company said its performance there has been “encouraging”.
“Our performance in the quarter continued to be impacted by lockdowns in mainland China but I was pleased to see our more localised approach drive recovery in EMEIA (Europe, the Middle East, India and Africa), where spending by local clients was above pre-pandemic levels,” said chief executive Jonathan Akeroyd.
“Our focus categories, leather goods and outerwear continued to perform well outside of mainland China and our programme of brand activations boosted customer engagement.
“While the current macroeconomic environment creates some near-term uncertainty, we are confident we can build on our platform for growth.”
The luxury company said little about the cost-of-living crisis, with bosses simply saying that they are “actively managing the headwind from inflation”.
The business said that sales in EMEIA grew 47% when compared with the lockdown-hit first quarter of last year.
Sales to American tourists rebounded in the region, it added.
Sales in the Americas themselves dropped 4% when compared against a strong performance this time last year. Outerwear and bags did well here, Burberry added.
Overall, outside its mainland China market the Lola handbag range performed well as Burberry released it in new shapes.
The company’s rainwear and jackets were also standout performers.