Burberry Faces Longer Road To Recovery, Sees Sales In China Slump

Burberry saw its Q2 sales flatline, with demand for its products declining due to bad weather and government crackdown in China.

China, which is Burberry’s largest market, was a key revenue driver that helped the luxury brand recover to its pre-pandemic levels in the first half of the financial year.

According to Burberry’s CFO, Julie Brown, the company saw a dip in foot traffic in the Chinese market in August but sales in September and October were in line with the brand’s expectations.

The decline in sales comes at a time when China’s President Xi Jinping has launched a wealth redistribution-focussed initiative, which has particularly had an impact on the broader luxury sector.

Burberry, however, has not seen a significant impact on its sales. “Our market tends to be the upper-middle class and we are actually finding that momentum has continued,” Brown said.

Meanwhile, sales in other international markets such as Europe continue to be slow due to a decline in tourism, which has made it a challenge for the brand to recover to pre-pandemic levels. As a result, sales in the first half of 2021 were down 31 percent from two years ago.

Still, the company is bullish on its growth prospects. Burberry’s Chairman Gerry Murphy noted that the company is positioned to achieve single-digit top-line growth and improve its margin.

The company reported a revenue of $1.64 billion for the six-month period ending September 25, up 45 percent at a constant exchange rate, according to .

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Originally published at https://retailbum.com on November 15, 2021.