Burberry says coronavirus has had ‘more significant impact on sales than Hong Kong protests’
Burberry has said that the coronavirus outbreak in China has had a more significant impact on its sales than the last year’s Hong Kong protests.
The luxury fashion group has had to close around 24 of its 64 stores in China, while the rest were operating on reduced hours.
The Chinese market accounts for around 20 per cent of its revenue.
Footfall was down by up to 80 per cent it said as consumers stay indoors, while there has been a similar impact in Hong Kong.
During the last quarter sales were halved in the region from eight per cent of the group in total amid the civil unrest.
Hong Kong has imposed a 14-day quarantine period on arrivals from China’s mainland.
“It is more serious in Hong Kong than the protests,” said chief financial officer Julie Brown. “This has had even more significant impact on our Hong Kong business.”
Burberry’s share price opened down more than two per cent on Friday morning.
Brown said Burberry was “very supportive” of the Chinese government’s efforts to contain the spread of the virus.
She said Burberry would issue an additional trading statement in mid-April to assess the financial impact of the outbreak.
“We have got around two weeks of information and we have another eight-and-a-half weeks to go until year-end,” she said. “It depends on the longevity of the outbreak and what happens next”.
Brown added that the luxury fashion retailer had seen “very good spending patterns” from Chinese holidaying abroad and said that the customer response to its latest designs had been strong.
Burberry’s key trading period is its third quarter, which covers Christmas and “golden week” celebrations in China.