WeChat, Chinese Tourists Fuel Burberry Despite Revenue Slip

Bucking the trend that hit other luxury brands such as Tiffany & Co. late last year, British luxury brand Burberry reported that it saw a return to Chinese tourist spending growth in the UK in the year-end quarter. It did, however, note decreased sales in Japan and Hong Kong partly caused by lower tourist spending, though it did not mention Chinese tourists specifically.

The company saw a one percent increase in comparable store sales in its third quarter of 2019 (quarter ending December 29, 2018), helped by a mid-single-digit increase in sales in mainland China, it reported. This was a slight acceleration in the growth rate from the previous quarter.

In its Jan. 23 earnings release, the company noted that its sales were boosted by the increased frequency of product drops and social media campaigns. The company added a total one million new followers in the quarter across Instagram and WeChat. In particular, Burberry saw a 50-percent increase in reach on WeChat.

On WeChat and elsewhere, the company has launched a dedicated Chinese New Year campaign that coincides with product drops from its “B Series” collection. Burberry said that it has thus far been successful, particularly for the men’s line. Some may be surprised that the Lunar New Year campaign has been deemed a winner considering the company had to pull some of its controversial “Burberry Modern New Year (摩登新禧)” photos that were deemed downbeat and “creepy” by netizens.

On January 3, the British fashion brand unveiled a global photography campaign meant to celebrate the upcoming Chinese Lunar New Year, which is February 5 this year. The images were produced by Ethan James Green, a talented American photographer who collaborated in the past with other luxury fashion houses like Alexander McQueen, Calvin Klein, and Marc Jacobs.

The company reported $928.9 million (£711 million) in revenue in the quarter, down from $939 million (£719 million) a year earlier.

Following the financial results, shares in Burberry opened down more than 2 percent but changed direction midday to end the trading day up nearly 3 percent at $2,388 (£1,828).


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