Burberry warns over virus impact on Chinese demand

Published February 7, 2020, 12:00 AM

by manilabulletin_admin

By Agence France-Presse

British fashion house Burberry warned Friday of a “material” negative impact from the coronavirus on demand for luxury goods in key market China, but gave no financial details.

“The outbreak of the coronavirus in mainland China is having a material negative effect on luxury demand,” said Chief Executive Marco Gobbetti in a brief statement in the group’s first remarks on the deadly virus.

(REUTERS / MANILA BUULLETIN)
(REUTERS / MANILA BULLETIN)

“While we cannot currently predict how long this situation will last, we remain confident in our strategy.

“In the meantime, we are taking mitigating actions and every precaution to help ensure the safety and wellbeing of our employees.

“We are extremely grateful for the incredible effort of our teams and our immediate thoughts are with the people directly impacted by this global health emergency.”

Burberry, famed for its designer handbags and trademark check pattern, has already taken a hit from pro-democracy protests in Hong Kong.

The London-listed group added Friday that 24 of its 64 stores in mainland China are shut due to coronavirus.

Remaining branches have reduced hours — and are experiencing “significant footfall declines”.

“This is impacting retail sales in both mainland China and Hong Kong,” the group noted.

Chinese demand elsewhere was meanwhile also expected to worsen.

“The spending patterns of Chinese customers in Europe and other tourist destinations have been less impacted to date but given widening travel restrictions, we anticipate these to worsen over the coming weeks,” it said.

Burberry added it was taking “mitigating actions” but the effect would be “limited” due to the proximity of the end of its financial year in March.

The company stressed its support for Beijing’s efforts to contain the coronavirus, which has killed more than 630 people and infected at least 31,000.

“We fully support the efforts the Chinese government is taking to contain the virus and we are working in close conjunction with local authorities and partners.”

 

 
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