China saves Richemont and Burberry’s Asia-Pacific figures
by Corinne Gretler,
2016-01-15 05:54:35.0
ZURICH — Burberry and Richemont said the luxury goods market returned to growth in mainland China at the end of last year, a balm for an industry suffering from a slump in Hong Kong.
Burberry, the British fashion house famous for its trench coats, said on Thursday that sales in China returned to growth in the three months to end-December, while Hong Kong revenue dropped more than 20%. The improvement helped Richemont, the maker of Cartier jewellery, report a 9% sales decline for the Asia-Pacific region, compared with the 16% drop analysts had expected.
Burberry shares rose as much as 5.5% in London.
The reports may assuage concern that the Chinese market will worsen in the coming year as the country’s economic growth weakens to the slowest pace in two decades.
Chinese consumers accounted for as much as half the world’s spending on Swiss watches in past years, according to Citigroup. For Burberry, 38% of its sales went to Chinese shoppers compared with 30% for its peers, analysts at Liberum said.
"The improvement in mainland China could be because the would-be tourists are buying more at home, but it could also be that the market there has finally bottomed out," said Zuzanna Pusz, an analyst at Berenberg in London.
Still, Chinese consumers were spending less overall, as they held back on purchases in markets such as Hong Kong, Burberry chief financial officer Carol Fairweather said.
"Hong Kong remained challenging, but Chinese shopping at home returned to growth."
Asia-Pacific sales, excluding Hong Kong and Macau, had risen by a mid-single digit percentage in the three months to end-December, Burberry said. Richemont’s fiscal third-quarter sales growth had improved in mainland China, while Hong Kong and Macau had "significantly" lower sales, the company said.
Richemont fell 2% to Sf64.15 by mid-morning on Thursday in Zurich.
Burberry gained 1.8% in London.
Bloomberg
IN THE BAG: Pedestrians walk past a Burberry store in the Causeway Bay shopping district of Hong Kong. Picture: BLOOMBERG/XAUME OLLEROS
ZURICH — Burberry and Richemont said the luxury goods market returned to growth in mainland China at the end of last year, a balm for an industry suffering from a slump in Hong Kong.
Burberry, the British fashion house famous for its trench coats, said on Thursday that sales in China returned to growth in the three months to end-December, while Hong Kong revenue dropped more than 20%. The improvement helped Richemont, the maker of Cartier jewellery, report a 9% sales decline for the Asia-Pacific region, compared with the 16% drop analysts had expected.
Burberry shares rose as much as 5.5% in London.
The reports may assuage concern that the Chinese market will worsen in the coming year as the country’s economic growth weakens to the slowest pace in two decades.
Chinese consumers accounted for as much as half the world’s spending on Swiss watches in past years, according to Citigroup. For Burberry, 38% of its sales went to Chinese shoppers compared with 30% for its peers, analysts at Liberum said.
"The improvement in mainland China could be because the would-be tourists are buying more at home, but it could also be that the market there has finally bottomed out," said Zuzanna Pusz, an analyst at Berenberg in London.
Still, Chinese consumers were spending less overall, as they held back on purchases in markets such as Hong Kong, Burberry chief financial officer Carol Fairweather said.
"Hong Kong remained challenging, but Chinese shopping at home returned to growth."
Asia-Pacific sales, excluding Hong Kong and Macau, had risen by a mid-single digit percentage in the three months to end-December, Burberry said. Richemont’s fiscal third-quarter sales growth had improved in mainland China, while Hong Kong and Macau had "significantly" lower sales, the company said.
Richemont fell 2% to Sf64.15 by mid-morning on Thursday in Zurich.
Burberry gained 1.8% in London.
Bloomberg
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