British fashion house Burberry is struggling with receding Chinese demand: despite strong online sales growth, in every region, the overall turnover growth has slowed down.
1.4 billion euro turnover in 6 months
In the past six months, Burberry has managed a 1.1 billion pound sterling (1.4 billion euro) turnover, according to a trading update from the British luxury fashion house. The retail branch grew 15 % to 748 million pounds (950 million euro), while the wholesale branch grew 13 % to 317 million pounds (400 million euro).
Burberry is apparently affected by lower Chinese demand, which has slowed down the like-for-like turnover growth from 12 % in the first quarter to 8 % in the second. Strong online sales growth in all regions has managed to offset the drop for the largest part.
"Difficult external environment"
Burberry opened nine new stores in the past six months, while closing eight. It has also opened six more boutiques in airports (Hong Kong, London Heathrow, Barcelona, Madrid, Milan Malpensa and Rome). In total, it now has 216 own boutiques, 224 concessions, 55 outlets and 66 franchise stores.
CEO Christopher Bailey, who succeeded Angela Ahrendts in May, is satisfied but remains cautious of the "difficult external environment". He pays increased attention to the "material impact of exchange rates on profits for the full fiscal year 2015", but adds that Burberry has "never been better prepared internally for the all-important festive periods."