Burberry sales growth slows in UK and China

Burberry, famous for its raincoats lined with a distinctive camel, red and black check pattern, also said it will directly operate fragrance and beauty product categories following the end of its existing licence relationship with Interparfums SA.

The group said sales at stores open over a year rose one per cent in the three months to September 30, its fiscal second quarter.

That compares with first quarter growth of six per cent and zero growth in the first 10 weeks of the second quarter, which Burberry disclosed on September 11.

Last month’s warning from Burberry, which sent its shares down over 20 per cent, was the clearest sign yet that a slowdown in China and fallout from Europe’s debt crisis was bringing a nearly three-year boom in demand for luxury goods to an end.

Burberry said total first half revenue was £883m, up eight per cent at constant exchange rates, with first quarter growth of 11 per cent slowing to five per cent in the second quarter.

It said that while trading in the UK and China slowed it remained robust in Hong Kong, France and Germany.

For the second half Burberry expects retail selling space to increase by about 14 per cent.

It forecast second half underlying wholesale revenue to be broadly unchanged year-on-year and forecast unchanged licensing revenue for the 2012/13 year as a whole.