Surprise increase in Chinese demand boots Burberry

Burberry saw a surprise increase in Chinese demand
Burberry saw a surprise increase in Chinese demand
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Luxury fashion brand Burberry posted a ​one​ per​ ​cent rise in third-quarter sales on Thursday buoyed by growth in China but said the outlook for the luxury sector remain​s​ uncertain.

Luxury fashion brand Burberry posted a ​one​ per​ cent rise in third-quarter sales on Thursday buoyed by growth in China but said the outlook for the luxury sector remain​s​ uncertain.

The 160-year-old company​, famous for its ​Yorkshire-made ​trenchcoats and cashmere scarves​, said the mainland China market had returned to growth but performance was weighed by Hong Kong and Macau.

Retail revenue grew by ​one​ per​ cent to ​£​603​m helped by strong demand in Europe.​Like-for-like sales were unchanged year on year, an improvement from a four per cent fall in the second quarter.

The results were in line with analysts' expectations, helping to ease concerns over a slowdown in the luxury sector, which has been hurt by a fall in Chinese buying.

Burberry reported a sharp sales slowdown in Hong Kong and China in October, leading the FTSE 100 company to miss sales growth forecasts and warn of an increasingly challenging environment for luxury goods.

Other luxury groups that expanded rapidly in mainland China such as Gucci and LVMH have also suffered from the economic uncertainty there, and violent stock market gyrations this year have not helped.

Chinese shoppers in Hong Kong and mainland China account for between 30 and 40 per cent of Burberry's global revenue.

The company is expected to report a full year pre-tax profit of £428m, down from £455.8m in the previous year.