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Burberry pre-tax profit hit by fewer Chinese tourists in Europe

Staff writer ▼ | May 18, 2016
Burberry reported a fall in full-year profits and said it expects the challenging environment for the luxury sector to continue.
Burberry
Burberry   Group like-for-like sales were down 1%
Pre-tax profits for the year to March 31, fell to £415.6m, from £444.6m last year. Revenues fell 1% on an underlying basis to £2.5bn. The company also said this year's profits would be at the lower end of forecasts.

Burberry plans to revamp its retail operations and is aiming to make annual savings of at least £100m by 2019. The group has been hit by a slowdown in Chinese tourists visiting its stores in Europe, and weak demand in Hong Kong.

While group like-for-like sales were down 1%, the company said if results from Hong Kong and Macau were excluded, then sales would have been up by 3%.

The company said Hong Kong, which accounted for 9% of its global retail and wholesale revenue, had suffered a "significantly lower footfall".

It expects the majority of its future growth to come from Chinese customers, who already account for 40% of Burberry's retail sales. The company said it was focusing on improved service, as well as bespoke products and campaigns for this market.


 

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