Burberry sales slump as Beijing’s zero Covid policy hits luxury brands
IIt’s not just the Chinese economy feeling the impact of zero-Covid – Burberry is also a victim.
The luxury fashion brand said sales fell 35% in China in the first quarter due to current Covid restrictions.
It is a key market for the company, with Chinese shoppers accounting for around a third of the global luxury industry before the pandemic, both at home and as tourists abroad.
Excluding China, Burberry’s sales rose 16% in the quarter, with trade in Europe, the Middle East, India and Africa jumping 47% from the first quarter of last year.
This is largely explained by a rebound in sales to American tourists in the region.
Overall, however, sales were up only 1pc.
Jonathan Akeroyd, CEO of Burberry, said:
Our performance in the quarter continued to be impacted by the lockdowns in mainland China, but I was pleased to see our more localized approach driving recovery in EMEIA, where local customer spending was above industry levels. before the pandemic.
Our focus categories, leather goods and outerwear, continued to perform well outside of mainland China and our brand activations program drove customer engagement.
Although the current macroeconomic environment creates some short-term uncertainty, we are confident that we can build on our growth platform.