Burberry boosted by China sales

Burberry boosted by China sales

Luxury fashion group Burberry has welcomed improved sales figures boosted by a strong performance in China.

The brand saw an improvement in under-pressure sales as China returned to growth, but revealed ongoing woes in Hong Kong and tougher trading in the UK.

The trendy trench coat manufacturer halted sharp falls in like-for-like retail sales, which remained unchanged in its Christmas quarter to 31 December against a 4% drop in the previous three months.

Burberry, which makes around a third of its sales from the Asia Pacific region and has a significant presence in China, has been hit hard by a reduction in luxury spending by Chinese shoppers, particularly in Hong Kong - traditionally a prime shopping destination for Chinese consumers.

The trading troubles in Hong Kong dragged on its overall performance in Asia, with sales down by a "mid single-digit percentage", according to the firm.

It added that the pull-back in luxury spending by Chinese and Middle Eastern tourists also affected its UK business, with trading becoming tougher over the festive quarter.

Christopher Bailey, chief creative and chief executive, said: "In a tougher environment than expected, our sustained focus on growth and cost control drove a number of positive results over the quarter."

But he cautioned the outlook for the luxury sector remained "uncertain", adding that the third quarter retail sales performance was still below internal forecasts.

Bailey has faced mounting pressure to revive flagging trading at Burberry, with shares at the group also languishing at three-year lows.

He has been slashing costs and boosting online sales as part of turnaround efforts against a slowdown in the luxury retail sector.