Bright spots of China, Korea fail to lift Burberry’s global sales as coronavirus hits luxury shopping in Europe, America

The British fashion house’s revenues came to US$936.7 million in the third quarter of its fiscal year, down by 5 per cent

With shops still hobbled by social distancing measures across the globe, Burberry sees huge opportunity in digital sales growth, particularly in mainland China

2-MIN READ2-MIN

Burberry’s flagship store in Regent Street is closed during London’s tier-four restrictions. Photo: LightRocket via Getty Images

Published: 9:04pm, 20 Jan 2021Updated: 9:04pm, 20 Jan 2021

Strong sales for Burberry in China and Korea were not enough to offset a weak performance in Europe and the Americas as the iconic British fashion brand reported lower revenues in the October to December period.

The brand known for its tan trench coats and tartan patterns said on Wednesday retail revenues came to £688 million (US$936.7 million) in the third quarter of its fiscal year, down by 5 per cent with exchange rates kept constant.

Comparable store sales declined 9 per cent from a year earlier overall despite an 11 per cent rise in Asia-Pacific, specifically in China and Korea. Sales in Europe, the Middle East, India and Africa fell 37 per cent – a drop attributed mainly to travel restrictions – while in the Americas they slipped by 8 per cent.

In 2019, Chinese consumers accounted for 35 per cent of sales in the global luxury market, much of that shopping done while travelling, according to the consultancy Bain & Company.

The decline in overall sales was worse than the 6 per cent drop Burberry reported in the second quarter, but much better than the 45 per cent contraction in the first quarter.

While online sales of full-priced items grew by more than half in the third quarter, with a triple-digit rise in mainland China, store closures averaged 7 per cent, which had an impact on trading.

“We currently have 15 per cent of stores closed, and 36 per cent operating with reduced hours or restrictions providing an uncertain trajectory given the spread of the more transmissible new variant of Covid-19,” said Julie Brown, chief operating and financial officer. “Given this outlook we expect trading to remain susceptible to regional disruptions as we close the financial year. However, we are well placed to accelerate once the pandemic eases.”