11 October 2012 10:26
Burberry has confirmed that a slowdown in sales during the second quarter hit its first-half results, adding to growing concern that the luxury goods sector may at last be feeling the impact of the economic crisis.
The firm, which warned on profits last month, confirmed a drop in demand in China, an indication that the Asian superpower may be seeing a slowdown at last. However, Burberry added that trading remained robust in Hong Kong, France and Germany in the second quarter.
The company added that it would continue to invest in its retail business, with 13 new mainline stores and openings in flagship markets including Milan, Rome, Hong Kong and Regent Street, London. Overall, retail space is expected to rise 14%. Angela Ahrendts, CEO, commented: "Against record prior year comparatives, Burberry delivered 8% total revenue growth and 10% retail growth in the first half, albeit slowing in the second quarter. In a more challenging external environment, footfall declined but brand momentum remained strong, particularly with our higher spending luxury consumer.
"Our highly experienced team remains very focused on the consistent execution of our key strategies, engaging consumers through innovative retail and digital marketing initiatives as we enter the most important quarter of the year. We continue to invest for long-term growth in flagship and emerging markets, while tightly controlling discretionary spend."