LONDON (AP) – Trench coat maker Burberry reported slowing sales Wednesday amid weakening demand in Asia and a volatile American market.
The luxury goods company said retail revenues rose to 407 million pounds ($637 million) in the three months ending June 30, driven by strong sales of British-made heritage trench coats and cashmere scarves. The figure represents an 8 percent increase in “underlying” sales, down from 17 percent in the same period last year.
Sales in the Asia Pacific region declined, hurt by the “continued challenging environment in Hong Kong,” the company said. Mainland China posted “low single-digit” growth.
“A number of factors, such as a stuttering economy, and Chinese President Xi Jinping’s crackdown on gift-giving corruption, have undermined consumer demand for luxury goods in the country,” said Andrew Hall of Conlumino, a retail consultant and researcher. “This changing consumer demand has led to a faltering of sales for Burberry, particularly in Hong Kong, where the sales decline reached double digits.”
The results will put pressure on CEO Christopher Bailey as he prepares for Thursday’s shareholders meeting.