Burberry’s Hong Kong Sales Decline More Than 20 Percent

Burberry's February 2016 womenswear runway show. (Courtesy Photo)

Burberry’s February 2016 womenswear runway show. (Courtesy Photo)

Hong Kong’s luxury slump continued to hit British luxury brand Burberry as its second-half sales results released today show a “challenging” environment for luxury, according to the company’s CEO.

Global comparable sales declined by 2 percent for the brand, with the Asia-Pacific region seeing a mid single-digit percentage decline. These numbers were brought down by Hong Kong and Macau, as global comparable sales excluding these regions saw 1 percent growth in H2. The fourth quarter was especially hard on the brand, as sales declined 5 percent after remaining unchanged in Q3.

As Hong Kong sees a continued decline in mainland Chinese tourist numbers—including a 26 percent drop in February—the brand’s total comparable sales in Hong Kong declined by more than 20 percent for the third quarter in a row.

Tourism industry struggles in in Europe and the UK due to the Paris and Brussels attacks also had an effect, as the brand also noted that its continental Europe shops saw slowing sales to Chinese travelers during the fourth quarter.

The bright spots for Burberry were mainland China, Korea, and Japan, which all saw “positive” growth. Japan, which has become a luxury shopping hotspot for Chinese tourists, saw double-digit growth in total retail revenue.

“In an external environment that remains challenging for luxury, we continue to focus on reducing discretionary costs and are making good progress with developing enhanced future productivity and efficiency plans,” said Burberry CEO Christopher Bailey, who noted that digital sales remained a highlight for the brand.

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